Wilmar also announced last week that it intends to acquire at least 58.45% of Benso Oil Palm Plantation Ltd from the stake held by Unilever Ghana for US$12m. As the proposed offer will also trigger a GO, the consideration would rise to US$20m for 100% of BOPP. Unilever Ghana has given its irrevocable undertaking to accept the offer. BOPP is an upstream palm oil producer and is listed in the Ghanian Stock Exchange.
Earnings impact from BOPP is immaterial considering that the company only booked 1Q10net profits of approximately US$0.5m. Since the tax fraud allegations surfaced on Wilmar in mid May- charts indicate that the stock’s downtrend remains intact. Despite today’s brief bounce, downtrend resistance remain capped at $6.20.
Monday, May 31, 2010
Pre-Market Updates
US stocks fell last Friday as Fitch Ratings stripped Spain of its AAA credit rating. In addition, energy shares sank on President Barack Obama’s moratorium on new deepwater drilling permits after BP’s efforts to contain the oil spill failed. The Institute for Supply Management-Chicago Inc. said its business barometer fell to 59.7this month from 63.8 in April, missing the estimate of 61 by 57 economists in a Bloomberg News survey. However, figures greater than 50 still signal expansion.
Nikkei 225 also opened lower after the country’s industrial production increased less than economists forecast in April. Based on a report released by Trade Ministry this morning, factory output rose 1.3% from March, when it gained 1.2%. According to Bloomberg survey, the median estimate of 26 economists was for a 2.5% increase.
DJI finished down 122 pts, 1.2%, to 10,137.
S&P500 was off 14 points, 1.2%, to 1,089.
Nasdaq fell 21 pts, 0.9%, to 2,257.
The Dow was down 7.9% for the month. The S&P 500 was off 8.2%.
The Nasdaq fell 8.3%, its worst loss since November 2008.
Nikkei 225 also opened lower after the country’s industrial production increased less than economists forecast in April. Based on a report released by Trade Ministry this morning, factory output rose 1.3% from March, when it gained 1.2%. According to Bloomberg survey, the median estimate of 26 economists was for a 2.5% increase.
DJI finished down 122 pts, 1.2%, to 10,137.
S&P500 was off 14 points, 1.2%, to 1,089.
Nasdaq fell 21 pts, 0.9%, to 2,257.
The Dow was down 7.9% for the month. The S&P 500 was off 8.2%.
The Nasdaq fell 8.3%, its worst loss since November 2008.
Thursday, May 27, 2010
Parkway
Market speculation of a mandatory general offer for Parkway may finally be proven accurate, with Fortis Healthcare widely believed to be the prime suspect. However, the fact that Khazanah had transferred its shares from a Singapore incorporated holding company into a Malaysian incorporated holding company, seemingly to make it easier to effect a friendly sale and smooth transfer, could provide another twist - that there may be more than one suitor for Parkway other than Fortis...
The cash offer for Parkway by Khazanah is S$3.78, representing 25% premium to last closing price. If successful, Knazanah will hold 51.5% stake of parkway
The cash offer for Parkway by Khazanah is S$3.78, representing 25% premium to last closing price. If successful, Knazanah will hold 51.5% stake of parkway
*Technical* Golden Agri
Golden Agri broke below the key support level 0.515. Momentum is weak with a test of support at 0.45/0.44 in the near term
*Technical* Straits Asia
Straits Asia forms bearish Head-&-Shoulders formation. This signal indicates that the price may fall to the range 1.25/30.It is currently in a downtrend and is below the 200-days EMA.
Market Outlook
Market will like stay soft - perhaps at least lasting through the first month of the world cup - the point here is that although STI has corrected abt 11% from its peak of 3019, valuations are still not that attractive. The main themes that are finding favor with investors appear to be tourism related (SATS, Genting SP) and business relocations to Singapore (CCT, Kland) and dividend plays (Suntec, MappleTree, Cache, AREIT - all paying between 7-8%).
CapitaCommerical Trust (Hold)
CapitaCommerical Trust just announced an asset enhancement initiative for one of its existing Grade A office buildings, Six Battery Rd. We understand the works are scheduled to commence in Oct 2010 and executed in phases over four years at a total capital expenditure of about $92m. The stock offers yield of about 6.6% based on last closing price of $1.1
KepLand
BUY, TP@ $4.71 pegged at 10% premium to RNAV. Kepland recently clinched a 1.6 ha site at Jurong Lake District (near Lakeside MRT). KepLand is paying $499 psf ppr. With about 550 unit to be ready to launch by end 2010, estimated breakeven price is $870 psf and ASP ~ $1,100 psf.
Pre-leasing activity at Ocean Financial Centre is also reportedly progressing well, ahead of its completion in 2011. Financial institution ANZ and legal firm Drew & Napier are expected to lease about 200,000 sq ft and 93,000 sq ft resepectively, bringing total pre-commitment to about 65%.
Pre-leasing activity at Ocean Financial Centre is also reportedly progressing well, ahead of its completion in 2011. Financial institution ANZ and legal firm Drew & Napier are expected to lease about 200,000 sq ft and 93,000 sq ft resepectively, bringing total pre-commitment to about 65%.
Biosensors
Biosensors reported a strong set of 4Q10 results which were above mkt expectation. Net profit surged to US$9.1m (partly helped by a US$2.4m contribution from its 50%-owned JW Medical Systems) while total product sales in the 4Q were US$29.9m (+46% YoY), driven largely by robust growth in the sales of the BioMatrix drug‐eluting stent across all regions. We believe the Co is close to reaching its target of a 10% share of the drug eluting stent (DES) mkt.
Looking ahead, mgmt believes that product revenue, excluding licensing and royalty revenues, will range between US$135.0m and US$145.0m. In addition, the Co expects overall profitability to grow over FY10 levels despite the effect of higher revenues may be partially offset by increased R&D expenses. We continue to see Biosensors as an attractive takeover target by other bigger incumbents.
Looking ahead, mgmt believes that product revenue, excluding licensing and royalty revenues, will range between US$135.0m and US$145.0m. In addition, the Co expects overall profitability to grow over FY10 levels despite the effect of higher revenues may be partially offset by increased R&D expenses. We continue to see Biosensors as an attractive takeover target by other bigger incumbents.
Pre-Market Updates
U.S. stocks fell yesterday, halting a global advance, and the euro weakened as reports that China may review investments in European govt bonds spurred concern the credit crisis will worsen. The DJIA lost 0.7%, dropping below 10,000 for the first time since Feb while the euro dropped to $1.2170, sinking toward the 4-year low of $1.2144 reached last wk. On the other hand, the Reuters/Jefferies CRB Index of commodities rose 1.6%.
Oil advanced 4%, the most since Sept, to $71.5 a barrel in New York after a U.S. government report showed gains in fuel consumption. Demand climbed 0.6% to 19.7m barrels a day in the week ended May 21, according to the US Energy Dept report.
Oil advanced 4%, the most since Sept, to $71.5 a barrel in New York after a U.S. government report showed gains in fuel consumption. Demand climbed 0.6% to 19.7m barrels a day in the week ended May 21, according to the US Energy Dept report.
Wednesday, May 26, 2010
Trading Ideas
Market is likely to remain volatile as risk aversion & derisking of all asset classes continue to dominate over fundamentals or valuations. For those who are keen to trade the market, the top 5 picks among the STI stocks with the highest beta are Noble, Sembcorp Marine, NOL, Olam & Gloden Agri while the boring but defensive names are SMRT, StarHub, SPH, SIA Engrg & ComfortDelgro
Genting Singapore
Genting Singapore +2.2% to $0.945 on broad market rise although stock unable to head back to $1.00 level since it reported huge 1Q10 loss due to impairment charge attributed to weak UK operations. Fundamentals in Singapore, however, remain positive with latest official data showing 20.4% yoy rise in visitor-arrivals in Apr despite April being traditionally a weaker month vs Feb & Mar given the lack of holidays. JPM has Overweight call with $1.35 target. Resistance at $0.975.
*Technical* Keppel Land
*Technical* Keppel Land is trading below it 100-days EMA at 3.50 .
If it fails to hold, next support at 3.20/22 ( 200-days EMA)
If it fails to hold, next support at 3.20/22 ( 200-days EMA)
Noble Group
Noble Group +4.4% at $1.68, higher for 1st time in 6 sessions although interest generally still subdued amid concerns over potential slowdown in commodities demand if euro-zone problems start to weigh on global economic growth. Analysts generally still upbeat about its group’s longer term prospects backed by contributions from oil & gas businesses currently in start-up phase as well as ongoing efforts to enlarge its global footprint. Resistance seen at $1.72 followed by $1.84.
China Minzhong
JPMorgan starts China Minzhong at Overweight with $1.45 target price, believes company is well positioned in China's fragmented vegetable cultivation, processing sector given its diversified product range, cost advantage stemming from integrated operations, stable repeat customer base & working relationships with government and suppliers. As an integrated processier, the group is able to supply both processed and fresh vegetables to customers.
Expects net profit growth of 21% to Rmb338m in FY10 & 27% to Rmb429m in FY11 putting the stock on 8.8x FY10 and 7x FY11 P/Es.
Expects net profit growth of 21% to Rmb338m in FY10 & 27% to Rmb429m in FY11 putting the stock on 8.8x FY10 and 7x FY11 P/Es.
SingTel
SingTel +2.2% at $2.82, as buyers start to nibble after recent weakness spurred by broad market fall, substantial FX exposure, rising competitive pressures & regulatory challenges facing the telco and its associates. SGD has appreciated about 10% against AUD where 44% of core earnings derived from Aust unit Optus, +3% against Indian Rs (Bharti) & 1% against Indon Rp (Telkomsel). Current gains not accompanied by firm volume, suggesting sentiment still guarded. Resistance at prev support at $2.90
*Technical* City Dev
*Technical* City Dev forms bearish Head-and-Shoulders formation. This bearish signal indicates that the price may fall to the range 10.00 - 9.70 . It is currently trading below the 200-days EMA.
Otto Marine
CIMB starts Otto Marine at Outperform with $0.47 target price based on 10x FY11 P/E. Says with marine group''s shipbuilding business still in early phase of recovery, earnings growth expected to be driven by ship chartering, geophysical services. But expects increasing shipbuilding enquiries to translate into firm orders, backed by easing financing conditions, stabilizing oil prices and group’s ability to build largest class of offshore vessels.
Bullish on chartering business which provides recurring cash flows, high gross margins of about 50%. Notes Otto has secured $409m worth of new chartering contracts for next 5-10 years and recent acquisition of company providing seismic services, which involve surveying seabed for hydrocarbons will expand its service range and gives it access to Oceanic region.
Bullish on chartering business which provides recurring cash flows, high gross margins of about 50%. Notes Otto has secured $409m worth of new chartering contracts for next 5-10 years and recent acquisition of company providing seismic services, which involve surveying seabed for hydrocarbons will expand its service range and gives it access to Oceanic region.
*Result* The Hour Glass
Downgrade to HOLD. The co achieved profit of $32.8m in FY10, while balance sheet remains strong as net cash grew 36% to $36m. Excluding a fair value gain on investment properties of $2.8m, core earnings reached pre-crisis levels of $30m. However, as consumer demand for luxury items softens amid economic uncertainties, start up costs on 3 new store expansions @ One Raffles Place, Marina Bay Sands, Knightsbridge and escalating rentals, we expect slower earnings momentum.
China Essence
China Essence reported 4Q10 net profit surged by 186% to RMB30.1m on the back of 15% growth in revenue to RMB204.3m. Comparing 2H results against 1H, we note that sales of potato starch has done particularly well with ASP bucking the trend. This has resulted in GPM increasing from 31.1% in 2Q to 33.4% in 4Q10. Going forward, the group expects to complete the construction of the 2 new plants in Nenjiang and Zhalantun, and commerce test production in FY11.
The Company is still in negotiations with DBS bank, concerning its loan of RMB342m due 30 June 2010. According to mtgm, there are a number of repayment options, among them an extension of the loan period or a refinancing arrangement. In view of the default risk, the stock is therefore valued at only 2.5x FY11 P/E (Mar YE), based on Bloomberg estimates.
The Company is still in negotiations with DBS bank, concerning its loan of RMB342m due 30 June 2010. According to mtgm, there are a number of repayment options, among them an extension of the loan period or a refinancing arrangement. In view of the default risk, the stock is therefore valued at only 2.5x FY11 P/E (Mar YE), based on Bloomberg estimates.
BreadTalk
BreadTalk’s 1Q10 net profit (-64% yoy) fell short of our house expectations, mainly due to the underperformance of its PRC food court operations, start-up costs and high tax rates. However, its bakery segment stays robust as EBIT grew 33% yoy. Looking ahead, we expect the restaurant business to recover in the next 12 mths when Ramen Play and Carl’s Junior start to contribute. In addition, the co is streamlining of its China food courts & net store expansions to enhance operating efficiencies.
The group is in a net cash position of $28m and continues to generate healthy operating cash flow. Our analyst has cut the earnings estimates by 17% for FY10 to factor in the weak 1Q10 and higher start-up costs. Accordingly, the TP is reduced from $1.04 to $0.70. In terms of valuation, the stock currently trades at about 12.7x Fy10 and 10.8x FY11 P/E.
The group is in a net cash position of $28m and continues to generate healthy operating cash flow. Our analyst has cut the earnings estimates by 17% for FY10 to factor in the weak 1Q10 and higher start-up costs. Accordingly, the TP is reduced from $1.04 to $0.70. In terms of valuation, the stock currently trades at about 12.7x Fy10 and 10.8x FY11 P/E.
Overnight Market
US stock markets recovered on Tuesday from heavy losses after being rattled by concerns over Europe's deepening debt crisis, tensions on the Korean peninsula and the prospect of a US banking overhaul. Strategists linked the rebound in stocks to strengthening in the euro. The single currency earlier fell to an 8 1/2-year low against the yen and approached a 4-year low versus the dollar, while safe-haven US Treasuries rallied.
The euro's strength has been a proxy for risk appetite and confidence in the euro-zone economy. European markets fell to their lowest level in nearly 9 months while the Libor three-month dollar rate rose to the highest level since July. The Spanish government's rescue of a local bank over the weekend made banks wary of lending to European institutions
The blue-chip DJIA recouped early losses of over 250 points to finish just above the symbolic 10,000 point mark, but still in the red, down 23 points to 10,044. The tech-rich Nasdaq Composite lost 2.60 points to 2,211. But the broad-based S&P 500 staged a dramatic comeback, closing up 0.38 points at 1,074. Earlier, the S&P 500 fell through the May 6 "flash crash" level to its lowest level since early Nov 09, down 14.5% from its late April closing high.
The CBOE VIX Index also known as Wall Street's fear indicator fell to 34.61 after reaching an earlier high of 43.74.
At one point all 30 of the Dow's stocks were down with shares in consumer and financial firms hit hardest but reports that derivatives curbs outlined in draft US legislation may be eased helped financial firms to recover some ground. Goldman Sachs shares soared over 4% followed by Wells Fargo, JPMorgan and BoA all ending in positive territory. Shares of materials companies and retailers were among the top performers, with the S&P Materials Index up 1.6% and the S&P Retail Index finishing up 1.4%
There was some positive US economic news for investors to chew. US consumer confidence rose for the 3rd straight month in May to 63.3, its highest score in more than two years from 57.7 last month. But that was countered single-family home prices dropping in the 1Q on renewed price pressure as federal aid faded away and income expectations remain downbeat.
Volume was strong with about 13.1bn shares traded, well above last year's daily average of 9.7bn.Declining stocks outnumbered advancing ones by a ratio of almost 2 to 1 on both the NYSE and Nasdaq.
Major U.S. indexes had fallen more than 3% early in the session.
The Dow dropped 22.82 pts, or 0.23%, to 10,043.75.
S&P500 Index gained just 0.38 pts, or 0.04%, to end at 1,074.03.
Nasdaq shed 2.60 pts, or 0.12%, to 2,210.95.
The euro's strength has been a proxy for risk appetite and confidence in the euro-zone economy. European markets fell to their lowest level in nearly 9 months while the Libor three-month dollar rate rose to the highest level since July. The Spanish government's rescue of a local bank over the weekend made banks wary of lending to European institutions
The blue-chip DJIA recouped early losses of over 250 points to finish just above the symbolic 10,000 point mark, but still in the red, down 23 points to 10,044. The tech-rich Nasdaq Composite lost 2.60 points to 2,211. But the broad-based S&P 500 staged a dramatic comeback, closing up 0.38 points at 1,074. Earlier, the S&P 500 fell through the May 6 "flash crash" level to its lowest level since early Nov 09, down 14.5% from its late April closing high.
The CBOE VIX Index also known as Wall Street's fear indicator fell to 34.61 after reaching an earlier high of 43.74.
At one point all 30 of the Dow's stocks were down with shares in consumer and financial firms hit hardest but reports that derivatives curbs outlined in draft US legislation may be eased helped financial firms to recover some ground. Goldman Sachs shares soared over 4% followed by Wells Fargo, JPMorgan and BoA all ending in positive territory. Shares of materials companies and retailers were among the top performers, with the S&P Materials Index up 1.6% and the S&P Retail Index finishing up 1.4%
There was some positive US economic news for investors to chew. US consumer confidence rose for the 3rd straight month in May to 63.3, its highest score in more than two years from 57.7 last month. But that was countered single-family home prices dropping in the 1Q on renewed price pressure as federal aid faded away and income expectations remain downbeat.
Volume was strong with about 13.1bn shares traded, well above last year's daily average of 9.7bn.Declining stocks outnumbered advancing ones by a ratio of almost 2 to 1 on both the NYSE and Nasdaq.
Major U.S. indexes had fallen more than 3% early in the session.
The Dow dropped 22.82 pts, or 0.23%, to 10,043.75.
S&P500 Index gained just 0.38 pts, or 0.04%, to end at 1,074.03.
Nasdaq shed 2.60 pts, or 0.12%, to 2,210.95.
Tuesday, May 25, 2010
Cityspring
OCBC downgrades Cityspring to Hold from Buy, trims target price to S$0.60 to assume higher risk premium. Adds while inherent nature of Cityspring's 3 businesses fairly stable, company remains exposed to regulatory risks, in particular those relating to conversion, liberalization of Singapore's town-gas network currently owned by unit City Gas; expect these issues to create overhang on the unit price
NOL
NOL down 2.1% at $1.85 as improvement in shipping group's latest operating data not able to boost sentiment amid broad market weakness. Rise in Apr volume (+34%), freight rates (+15%) suggests business has yet hit by fallout from Europe's debt problems, Morgan Stanley says slowing consumer demand in Europe will have greater impact from 2H10, but remains upbeat on NOL's prospects as impact will be offset by improving demand conditions in the US & fast growing emerging markets of Latin Am & Asia. But technicals show stock is still on downtrend
Metro Hldgs
Metro Hldgs reported 4Q10 net profit of S$56m (+47% yoy) largely due to a S$22.3m gain from fair value adjustments on investment properties. If we exclude these non-recurring items, earnings would hv been S$13.5m (-25% yoy). 4Q revenue rose 15.1% YoY to S$39.9m as retail division reported higher sales with the opening of its Metro City Square dept store in S’pore. As of end-mar-2010, the group has cash of S$174.1m (about 35% of mkt cap).
The mgtm has proposed a final div of 2cts and special div of 1cts, with yield of almost 4%.
The mgtm has proposed a final div of 2cts and special div of 1cts, with yield of almost 4%.
Prudential
Prudential should trade near London close of £5.30 or S$10.75 in HK/S’pore debut today. Shares start trading in HK, Singapore today by way of introduction as British insurance giant taps region to help fund US$21bn takeover of Asian insurer AIA. Investors thinking about buying Prudential shares need to be aware of deeply discounted 11-for-2 rights issue plan, priced at £1.04 each, 80.4% discount to last close.
There are some investor concerns about Prudential mega-deal's price tag (which is larger than its own market cap) and its ambitious expansion plans in Asia; which may create a large financing burden.
Prudential be traded in board lots of 500 shares, denominated in USD. Price will take off from London''s last closing price of £5.30 (US$7.65). As Prudential will also make debut in Hong Kong, traded in HKD, performance in Singapore likely to take cue from HK, with shares being fungible.
There are some investor concerns about Prudential mega-deal's price tag (which is larger than its own market cap) and its ambitious expansion plans in Asia; which may create a large financing burden.
Prudential be traded in board lots of 500 shares, denominated in USD. Price will take off from London''s last closing price of £5.30 (US$7.65). As Prudential will also make debut in Hong Kong, traded in HKD, performance in Singapore likely to take cue from HK, with shares being fungible.
Tat Hong
Tat Hong reported 4Q10 earnings declined by 33% to $9.8m despite an 18% rise in topline revenue to $130.9m. On a full year basis, net profit dropped by 44% YoY to S$38.6m while revenue fell 22% to S$495.4m as infrastructure and resource spending was cut back in its key mkts. Notably, all business segments recorded a slump in performance, except for its tower crane unit, which registered a 37% growth in revenue in FY10.
Overnight Market
U.S. stocks fell, dragging the Dow to its lowest level in three months, as the seizure of a Spanish bank and rising borrowing costs spurred concern Europe’s debt crisis will halt the global recovery.
US stocks slid on Monday as fresh signs of Europe's debt crisis emerge, triggered by the rescue of a Spanish savings bank. The euro dipped 1.6% to 1.2374, erasing most of last week’s gains while Libor for three- month loans in dollars climbed to the highest since July 09. Oil and copper gained on signs China may delay measures to slow economic growth.
Concerns about Europe's banking system weighed on markets after the Bank of Spain took over a small regional savings bank, CajaSur, exacerbating fears of a debt contagion spreading throughout financial markets.
The DJIA lost 127 points ot 1.24% to end at 10,067, its lowest level since Feb 10, extending last week's massive losses when the blue-chip index shrank more than 4% and briefly fell below the sensitive 10,000-point level. The tech-rich Nasdaq composite dipped 15 points to 2,214 while the broad-market S&P 500 declined 14 points or 1.29% to 1,074.
Financial shares were among the day's largest decliners. JPMorgan and BoA lost more than 3.5% to lead the Dow lower and financial shares tumbled 2.9% as a group for the biggest drop among 10 industries in the S&P 500.
Despite the accelerated selling late in the day, some pockets of strength remained in the market especially in the tech sector. Apple advanced 1.8% after Morgan Stanley raised its price target on the stock and added the company to its "Best Ideas" list. Google 1.1% after Citigroup added the No. 1 Internet search engine to its top picks live list. Yahoo! gained 0.5% as it partnered with Finnish firm Nokia, the world's largest mobile phone maker for an Internet services venture.
US existing home homes rose 7.6% to a 5-month high in April as buyers rushed to close on contracts before a federal home buyer tax credit expired.
Volume was light; declining stocks outnumbered advancing ones on the NYSE by a ratio of 19 to 12, while on the Nasdaq, nearly two stocks fell for every one that rose.
US stocks slid on Monday as fresh signs of Europe's debt crisis emerge, triggered by the rescue of a Spanish savings bank. The euro dipped 1.6% to 1.2374, erasing most of last week’s gains while Libor for three- month loans in dollars climbed to the highest since July 09. Oil and copper gained on signs China may delay measures to slow economic growth.
Concerns about Europe's banking system weighed on markets after the Bank of Spain took over a small regional savings bank, CajaSur, exacerbating fears of a debt contagion spreading throughout financial markets.
The DJIA lost 127 points ot 1.24% to end at 10,067, its lowest level since Feb 10, extending last week's massive losses when the blue-chip index shrank more than 4% and briefly fell below the sensitive 10,000-point level. The tech-rich Nasdaq composite dipped 15 points to 2,214 while the broad-market S&P 500 declined 14 points or 1.29% to 1,074.
Financial shares were among the day's largest decliners. JPMorgan and BoA lost more than 3.5% to lead the Dow lower and financial shares tumbled 2.9% as a group for the biggest drop among 10 industries in the S&P 500.
Despite the accelerated selling late in the day, some pockets of strength remained in the market especially in the tech sector. Apple advanced 1.8% after Morgan Stanley raised its price target on the stock and added the company to its "Best Ideas" list. Google 1.1% after Citigroup added the No. 1 Internet search engine to its top picks live list. Yahoo! gained 0.5% as it partnered with Finnish firm Nokia, the world's largest mobile phone maker for an Internet services venture.
US existing home homes rose 7.6% to a 5-month high in April as buyers rushed to close on contracts before a federal home buyer tax credit expired.
Volume was light; declining stocks outnumbered advancing ones on the NYSE by a ratio of 19 to 12, while on the Nasdaq, nearly two stocks fell for every one that rose.
Monday, May 24, 2010
Parkway Holdings
UBS Reiterates Buy call on Parkway Holdings with a new TP of $4.00 despite the stock's recent out-performance and rich ex-property valuations; cites higher ASP assumptions of its Novena mediacl suites (sold 150 out of 259 units). Increased stake by Fortis Healcare from 23.9% to 25.2% is viewed as a strong vote of confidence by the new shareholders, which could drive synergistic benefits going forward.
Tightening housing measure in China
Shares of listed developers with China exposure notably higher in active trades, tracking rebound by peers in HK and Shanghai, on hopes that Beijing will be less aggressive in seeking to rein in home prices. China Times quoted a NDRC official as saying that China will not impose any property tax on residential housing for another 3 years. If true, it will mean no further major tightening measures in the pipeline.
Housing accounts for one-third of fixed asset investments and a drastic slowdown could curtail the 8% GDP growth target. Yanlord Land +4.9% at $1.70, Ying Li +2.5% at $0.41, Guocoland +4.4% at $2.12, CapitaLand +2.6% at $3.60.
Housing accounts for one-third of fixed asset investments and a drastic slowdown could curtail the 8% GDP growth target. Yanlord Land +4.9% at $1.70, Ying Li +2.5% at $0.41, Guocoland +4.4% at $2.12, CapitaLand +2.6% at $3.60.
*Technical* WingTai
*Technical* WingTai is trading towards the downside with a test of support at 1.55 Next support at 1.46/47.
RSI is below 30, MACD is negative and below its signal line. Stock is trading under both 20 and 50-days EMA.
RSI is below 30, MACD is negative and below its signal line. Stock is trading under both 20 and 50-days EMA.
Yangzijiang
YZJ has made an announcement that it is seeking to offer and list Taiwan Depository Receipts (TDRs) of up to 100m new ordinary shares in the capital of the Group on the Taiwan Stock Exchange. The TDR Shares, if fully issued will constitute about up to 2.66% of the enlarged share capital of the Group. According to mgtm, the rationale of the dual-listing is mainly to broaden/diversify its shareholders base and improve valuation as well as raising funds to pursue potential M&As.
CACHE
Macquarie has initiated coverage on Cache Logistics at Outperform rating with price target of S$1.08. Based on last closing price of $0.93, the logistics trust still offers yield of about 8.3%
Bukit Semb
Bukit Semb’s return to profitability in 4QFY10 unlikely to generate strong interest as results were boosted by $40m write-back. FY10 net profit turned around to $55m from $47m loss the previous year. 4Q gross margin tumbled to 26% from 88% year earlier due to higher construction, land costs. Still, developer guiding for better profit in FY11 on sales of its Luxus Hills project (fully sold) and planned launches of Paterson Suites (82 units) and The Vermont at Cairnhill (158 units) later this year
Mgmt has been slow to launch these luxury projects since acquiring these sites 4 years ago and risk missing the height of the property boom.
Mgmt has been slow to launch these luxury projects since acquiring these sites 4 years ago and risk missing the height of the property boom.
Allgreen
Citi downgraded Allgreen to Sell after cutting FY10 earnings by 21% following weak sales at Cascadia (sold only 30 units out of 140 launched) at Bt Timah & anticipated delays in project launches of RV REsidences, Riverbay & Riveria 38. The group also has an increased exposure in China with projects in Chengdu (25% stake), Tangshan, Shenyang, Tianjin & Qinghuangdao. TP lowered to $0.93 at 50% discount to RNAV. Stock breached triple bottom support at $1.08.
SIA
SIA reported a 80% plunge in FY10 net profit to $216m with revenue -21% to $12.7bn. However, 4Q net profit of $278m (in line with mkt estimates of $240m), reversed 1H losses of $466m, helped by a 23% drop in fuel costs to $997m and 13% slide in staff costs to $495m. 4Q passenger yields were encouraging at 11.1¢/km vs 10.2¢/km in the 1st 9 mths while cargo yield jumped to 34.9¢/ltk in the 4Q from 31¢/ltk. SilkAir reported 4Q operating profit $31m vs $17m yoy; SIA Cargo $8m vs $123m loss yoy
The carrier is proposing final DPS of 12¢ representing 66% payout. Advance bookings for travel are encouraging especially in business class and the carrier is adding capacity across its network. The return of premium traffic will help SIA enhance yields at greater pace than some of its regional peers. Forward indicators suggest that the recent recovery in volumes of air cargo will hold up in the near term. At 1.25x P/B and 12x FY11 P/E, valuations are undemanding for earnings turnaround story
The carrier is proposing final DPS of 12¢ representing 66% payout. Advance bookings for travel are encouraging especially in business class and the carrier is adding capacity across its network. The return of premium traffic will help SIA enhance yields at greater pace than some of its regional peers. Forward indicators suggest that the recent recovery in volumes of air cargo will hold up in the near term. At 1.25x P/B and 12x FY11 P/E, valuations are undemanding for earnings turnaround story
Pre-Market Updates 24/05/10
The market was so volatile on Friday that Dow Jones was off some 30 points perhaps a half-hour before the close. Then, late buyers. seemingly out of nowhere, suddenly and powerfully appeared, pushing the blue-chip index to a gain of 125 points, or 1.3%, at 10,193
The 10 sectors of the S&P500 all moved higher, with financial stocks the leaders, followed by materials and consumer discretionary stocks. The S&P500 was up 16 points, 1.5%, to 1,088, and the Nasdaq rallied to a close of 2,229, up 25 points, or 1.1%.
For the month, the Dow is off 7.4%, with the S&P down 8.3% and the Nasdaq off 9.4%. The Dow is now down 2.3% for the year. The S&P500 is off 2.5%, and the Nasdaq is off 1.8%
The 10 sectors of the S&P500 all moved higher, with financial stocks the leaders, followed by materials and consumer discretionary stocks. The S&P500 was up 16 points, 1.5%, to 1,088, and the Nasdaq rallied to a close of 2,229, up 25 points, or 1.1%.
For the month, the Dow is off 7.4%, with the S&P down 8.3% and the Nasdaq off 9.4%. The Dow is now down 2.3% for the year. The S&P500 is off 2.5%, and the Nasdaq is off 1.8%
Friday, May 21, 2010
CSC Holdings
DMG cuts CSC Holdings target price to 26.5¢ from 29¢ based on 12X FY11 P/E after reducing FY11 earnings estimate by 6% to assume softer construction demand vs 2008/09 peak. But keeps Buy call as construction group's outlook still positive, backed by $170m orderbook, opportunities in Vietnam; firm has just completed a project ahead of schedule and is tendering for a few more projects there." Expects overseas contribution to group revenue to reach 20% in FY11 from 6% in FY09.
Tiger Airways
Tiger Airways has been awarded S$4.7m in damages resulting from its breach of contract claim against Swissport Swissport. This is the full amount claimed by the airline for damages incurred as a result of Swissport’s premature termination of its ground handling agreement with Tiger Airways. Once received, this amount, plus costs awarded, will be recognized in the airline’s financial accounts. The stock trades at 12x and 4x FY11 (Mar YE) P/E and P/B respectively.
Wilmar
Selling pressure on Wilmar tapering off after 13.4% loss in last 4 sessions. Stock off 0.2% at $5.48, one of smallest percentage decliners amongst STI names. MS sees the market reaction to Wilmar's tax fraud investigation as overdone as the amounts Wilmar have claimed look reasonable relative to the volumes exported, maintains OW with $7.80 target. CIMB, which has OP with $7.85 target, says stock trades at attractive 13.5x forward P/E vs historical 16.5x but company unable to provide timeline for resolution of this case.
Reduced target price to $7.20.
Reduced target price to $7.20.
CH Offshore
*Technical* CH Offshore gap-down 8.6%. Now is trading at 0.53 . Support 0.495 ; Resistance 0.58 (yesterady's close)
*Technical* Mermaid
*Technical* Mermaid down 6% with a test of support at 0.445 ; Resistance 0.63 . It is trading in a downtrend decending channel.
NOL
Morgan Stanley upgraded NOL to Overweight, raised target price to $2.35 vs $1.85 based on 1.4x P/B; believes current price already factored in concerns that Europe’s debt issues could result in sharp collapse in container shipping volumes, fall in freight rates. Expects improving US demand to partly offset weakness in European demand. Adds shipping companies' focus on gradual, disciplined capacity expansion will maintain freight rates, profitability and NOL to revert to profitability sooner the implementation of the Transpacific contract rates and strength of Asia-Europe freight rates over the past 5 months.
*Technical* STI
*Technical* STI breached all the major technical support levels. It is officially in a correction. Next support level at 26010/00 ; Resistance at 2740
*Technical* Wilmar
*Technical* Wilmar dipped 3% . Now is trading at 5.28 . Next support level may be tested at 5.00. If it fails to hold, more downside may be expected with the next support level near 4.38 ( Fibbonacci 50%)
SingTel
SingTel has cracked its 12-month $2.90 support level and this is expected to take STI down along with it. We believe SingTel is hit by growing concerns over its overseas associates. With data usage becoming a key revenue driver for Indonesia’s telco operators, the worry is that Telkomsel, its 35% owned Indon associate will be the loser in the data war as other competitors like Indosat roll out their capex plans ahead of Telkomsel.
Meantime, Bhart, its Indian unit is facing difficulties in competition, 3G license fees and regulatory challenges on top of trying to integrate is newly acquiring African assets. With the AUD fast losing ground to S$1.14, it is also likely to see forex translation losses on the revenue and earnings from its Australian arm, Optus which has been a key earnings driver recently.
Meantime, Bhart, its Indian unit is facing difficulties in competition, 3G license fees and regulatory challenges on top of trying to integrate is newly acquiring African assets. With the AUD fast losing ground to S$1.14, it is also likely to see forex translation losses on the revenue and earnings from its Australian arm, Optus which has been a key earnings driver recently.
*Technical* Noble
*Technical* Noble is down 8%. Now is trading at 1.57 . It broke previous support at 1.60 Next possible support at 1.485 ( Fibonacci 38.2% )
TIONG Seng Holdings
TIONG Seng Holdings, a recently listed construction group and property developer, has signed a RMB4.5bn (or S$921m) agreement with the master developer of Tianjin Eco-City and a Japanese real estate company to create the first river-front eco-neighbourhood in the eco-city. We understand that the total residential GFA of the three plots is estimated to be 360,600 sqm with 2,650 residential units.
According to mgtm, the JV project is expected to have a positive financial impact on Tiong Seng starting FY12 though they did not disclose any figures. The counter is now trading at 3.7x historical P/E.
According to mgtm, the JV project is expected to have a positive financial impact on Tiong Seng starting FY12 though they did not disclose any figures. The counter is now trading at 3.7x historical P/E.
MCL Land
MCL Land has emerged as a top bidder for a 99 yr leasehold residential site at Hougang Ave with its S$207.5m bid. Price will work out to S$456 psf ppr, which was about 10% higher than the 2nd highest bid from Frasers Centrepoint. Assuming a construction cost of $280 psf and an all-in breakeven of about $780 psf, the new project is likely to be priced at about $900 psf. This translates to a pre-tax margin of about 13%.
Our property analyst estimates that this will add about 9 cents/share to MCL Land's current RNAV of $3.59. The closest comparable would be Kovan Residences, which perhaps is in a better location beside the Kovan MRT Station, and is transacting in the secondary mkt at about $950 psf in recent mths. After securing this site, MCL Land would have replenished its landbank to about 1m sq ft in GFA. The stock trades at about 49% discount to its RNAV and supported by a FY10F dividend yield of 6.9%.
Our property analyst estimates that this will add about 9 cents/share to MCL Land's current RNAV of $3.59. The closest comparable would be Kovan Residences, which perhaps is in a better location beside the Kovan MRT Station, and is transacting in the secondary mkt at about $950 psf in recent mths. After securing this site, MCL Land would have replenished its landbank to about 1m sq ft in GFA. The stock trades at about 49% discount to its RNAV and supported by a FY10F dividend yield of 6.9%.
Swiber
Swiber announced that it has secured a LOA from a leading O&G operator in South Asia worth about US$618m. Notably, this represents the single largest contract that Swiber and its consortium has won to date. We understand that the scope of work which involves EPCIC is expected in 2Q12. with this latest contract, we estiamtes Swiber order book stands at almost US$1.48b, which will be progressively recongnised over the next two years.
The stock is currently trading at consensus 9.0x FY10 and 6.8x FY11 P/E. Other near-term catalysts include more contracts win and the successful listing of its subsea services business on the Catalist.
The stock is currently trading at consensus 9.0x FY10 and 6.8x FY11 P/E. Other near-term catalysts include more contracts win and the successful listing of its subsea services business on the Catalist.
Pre Market Open 21/05/10
US stocks slumped on Thursday on growing fears the euro zone's efforts to tackle its sovereign debt crisis will fall short, jeopardizing the global economic recovery and disappointing US economic data with the Dow barely clinging to the 10,000 level. Commodities plunged and Treasuries soared.
The DJIA fell 376 points or 3.6% to 10,068, its 3rd straight day of losses and biggest percentage fall since March 5 last year. The tech-rich Nasdaq Composite fell 94 points or 4.1% to 2,204 while the broad-market S&P 500 shed 43 points or 3.9% to 1,072, down 12% from its Apr high, signaling a correction and marking the worst day since late Apr 09. The index also ended below the key 200-day moving average support.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of nearly 19 to 1 while on the Nasdaq, more than 11 stocks fell for every one that rose. The CBOE Volatility or VIX Index jumped 30% to 45.79, its highest level since Mar 09.
All 30 of the Dow's blue-chip components closed lower. Industrial and commodity-related stock tumbled more than 4.4% each to lead declines in all 10 of the S&P 500’s main industry groups. BoA, Alcoa and GE dropped more than 5.7%. Dell prvided little comfort after the bell when it reported stronger-than-expected profit but warned of volatile global currencies and components shortages. Its stock fell 3.1% in extended trade.
Tonight’s expiration of US stock options and progress on a financial-reform bill may have added to volatility after US jobless claims unexpectedly increased to 471,000 last week and the Conference Board’s index of leading economic indicators posted a surprise drop of 0.1%. The slide came a day before the German parliament votes on the country’s contribution to US$1 trillion EU/IMF rescue fund. Looking ahead to today, investors will have their eyes on the German IFO and the European mfg PMIs.
Pls note the German lower house of parliament is due to announce their plans on how much to contribute to the EU/IMF rescue fund either tonight or weekend.
The DJIA fell 376 points or 3.6% to 10,068, its 3rd straight day of losses and biggest percentage fall since March 5 last year. The tech-rich Nasdaq Composite fell 94 points or 4.1% to 2,204 while the broad-market S&P 500 shed 43 points or 3.9% to 1,072, down 12% from its Apr high, signaling a correction and marking the worst day since late Apr 09. The index also ended below the key 200-day moving average support.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of nearly 19 to 1 while on the Nasdaq, more than 11 stocks fell for every one that rose. The CBOE Volatility or VIX Index jumped 30% to 45.79, its highest level since Mar 09.
All 30 of the Dow's blue-chip components closed lower. Industrial and commodity-related stock tumbled more than 4.4% each to lead declines in all 10 of the S&P 500’s main industry groups. BoA, Alcoa and GE dropped more than 5.7%. Dell prvided little comfort after the bell when it reported stronger-than-expected profit but warned of volatile global currencies and components shortages. Its stock fell 3.1% in extended trade.
Tonight’s expiration of US stock options and progress on a financial-reform bill may have added to volatility after US jobless claims unexpectedly increased to 471,000 last week and the Conference Board’s index of leading economic indicators posted a surprise drop of 0.1%. The slide came a day before the German parliament votes on the country’s contribution to US$1 trillion EU/IMF rescue fund. Looking ahead to today, investors will have their eyes on the German IFO and the European mfg PMIs.
Pls note the German lower house of parliament is due to announce their plans on how much to contribute to the EU/IMF rescue fund either tonight or weekend.
Thursday, May 20, 2010
Commodity Stock Price
Olam next support may be tested at 2.18 ; Wilmar support at 5.11 ; St Enginee support 3.05 and Noble 1.60 (broke previous support at 1.70)
FCT
FCT highlighted in recent DB conference last week - rental reversion growth of 6.6% in FY10 sustainable, looking to acquire Bedok Point and Centrepoint, upgrading Causeway Pt & considering retail suburban malls in M'sia. Gearing is comfortable 31.4% & confident of refinancing $260m debt due Jul 2011 at lower cost
STI broke 200-day moving average at 2776, trading below trend channel
STI broke 200-day moving average at 2776, trading below trend channel
*Technical* Noble
*Technical* Noble staged a breakdown below the 1.80 (200-days EMA) level.
If Noble fails to hold near the 1.80 level, more downside may be expected with the next test of support at 1.70
Noble - as the marketer for India sourced iron ore to China steel producers may see its iron ore revenue decline as India considers banning overseas sales to boost local supplies and curb domestic cost. Indian finance ministry is also reviewing the tax on iron ore exporter. According to Federation of Indian Mineral Industries, iron ore shipment may drop 25% this fiscal year as the government has been increasing export tax and duty tax.
If Noble fails to hold near the 1.80 level, more downside may be expected with the next test of support at 1.70
Noble - as the marketer for India sourced iron ore to China steel producers may see its iron ore revenue decline as India considers banning overseas sales to boost local supplies and curb domestic cost. Indian finance ministry is also reviewing the tax on iron ore exporter. According to Federation of Indian Mineral Industries, iron ore shipment may drop 25% this fiscal year as the government has been increasing export tax and duty tax.
*Technical* HSI
*Technical* HSI rose 117 to 19,696. Among the stocks in the index 31 rose, 11 fell and 1 was unchanged. Gains in the HSI were led by Cnooc, China Construction Bank and Hsbc. HSI is in a downtrend. It broke previous Support @ 19920 ; Next price level may be tested near 19160 . Short-term resistance 20100
*Technical* Suntec REIT
*Technical* Suntec REIT may test the resistance level at 1.31 . STochastic staged a crossover near the oversold level. Support level at 1.26 . CIMB-GK increased their target px to 1.60
Hsu Fu Chi Int’l
UOBKH starts Hsu Fu Chi Int’l at Hold with $2.75 target price citing China-focused confectionery maker has mass-market appeal with wide range of products catering to various market segments. With over 95% of sales coming from China, the company is an excellent proxy to rising consumption in China on the back of an appreciating Rmb. The company has more than 3,060 specialty counters across China, dominant position in candy market and superior gross margins but stock already fairly valued.
DBS
DBS have gone ex-dividend today and will be paying out 2 sets of dividends - 14¢ final dividend for FY09 and another 14¢ interim dividend for 1Q10 results. The stock has only adjusted 18¢ vs the total payout of 28¢.
Sembcorp
Sembcorp Industries disclosed that the US court has denied Cascal’s claim that its proposed tender offer for the NYSE-listed water & wastewater treatment company is in breach of any securities regulation or contractual obligations. This will pave SCI’s offer for the remaining 41.6% of Cascal at US$6.40 (assuming it secures <80%)>80%). This may turn out to be a hollow victory as the stock is trading at a slight premium to its offer price despite its recent price decline to US$6.75.
At any rate, we believe SCI will be happy, having garnered a controlling 58.4% stake in the company. The acquisition will expand SCI;s global footprint by another 8 countries and water capacity by 50% and will be earnings accretive from FY11 onwards.
At any rate, we believe SCI will be happy, having garnered a controlling 58.4% stake in the company. The acquisition will expand SCI;s global footprint by another 8 countries and water capacity by 50% and will be earnings accretive from FY11 onwards.
Super Group
Super Group said that it hopes to boost revenue from industrial customers to 40% of the business in 3-4 yrs from the current 10%. Notably, the Co is adding a third non-dairy creamer production line at its China plant which will boost output by 50% to 75k tons. We note that this division accounted for S$31m in sales or 10.5% of total revenue in FY09. Super's chairman, David Teo highlights the expansion will help it meet strong industrial demand espeically from China and Taiwan.
Based on KE estimates, the stock is trading at about 10x FY10 core P/E, which is undemanding against its listed peers in HK. The co is in the process of applying for dual listing in Taiwan.
Based on KE estimates, the stock is trading at about 10x FY10 core P/E, which is undemanding against its listed peers in HK. The co is in the process of applying for dual listing in Taiwan.
F&N
Fraser & Neave Ltd. The property developer and brewer said its Times Publishing Ltd. unit agreed to sell 60% of Shenyang Times Packaging Printing Co. for S$12.5 million ($8.9 million). F&N lost 1.4% to S$4.78. Prices are trading in an uptrend with a test of resistance at 5.10(52 wks high) Short term support at 4.70
Wilmar Updates 2
Wilmar has denied allegations from media reports that it is in collusion with tax officials to underpay Indonesian value added tax (VAT) through questionable and fictitious restitution claims. VAT is payable for Indonesian domestic purchases of palm oil and restitution of VAT payments arises out of refunds when this palm oil is exported. Wilmar can claim back the 10% VAT paid on these export sales. Wilmar says it is in full compliance with the VAT laws in Indonesia.
In the wake of this news, Wilmar's mkt cap has fallen by some US$1.97bn, or 7% yesterday. While this may be an overreaction, also partly driven by the soft broader market, we think sentiment on this stock may be weak in the short term on lingering concerns of the company's coporate goverance. KIm Eng is reducing our fair value FY10 PER multiple to 18x from 20x, to account for this risk. Our new TP is now S$7.20.
In the wake of this news, Wilmar's mkt cap has fallen by some US$1.97bn, or 7% yesterday. While this may be an overreaction, also partly driven by the soft broader market, we think sentiment on this stock may be weak in the short term on lingering concerns of the company's coporate goverance. KIm Eng is reducing our fair value FY10 PER multiple to 18x from 20x, to account for this risk. Our new TP is now S$7.20.
FabChem
FabChem, an explosives maker based in China, reported FY10 net RMB47.2m (+35.1% yoy) on the back of 53% revenue growth to RMB322.7m. This was mainly due to full year sales of ammonium nitrate by its newly acquired subsidiary, Hebei Yinguang, which accounted for about RMB75.3m in revenue. However, this segment also dragged the group's GPM lower to 35.3% vs 38% last year.
With improved operating cash flow, Fabchem also declares a dividend payout of S$0.005 per share. The stock trades at about 7x FY10 P/E
With improved operating cash flow, Fabchem also declares a dividend payout of S$0.005 per share. The stock trades at about 7x FY10 P/E
SIA Engineering
SIA Engineering has secured a S$42m fleet mgmt programme (FMP) contract with Royal Brunei Airlines to provide maintenance and fleet mgmt services for its fleet of six Boeing B777-200ER aircraft, which it is leasing from S'pore Airlines (SIA). Under the FMP contract that will commence in May-10, SIE will provide Royal Brunei Airlines with a wide range of services, including fleet technical mgmt, spares support, component repair and overhaul, and heavy maintenance services in Bandar and S'pore.
Overall, the latest order win is within our assumption, hence there is no change to our forecasts. The stock is trading at 16x FY11 P/E (Mar YE) with dividend yield of about 5%. Our house’s TP for SIA Engineering is $4.21.
Overall, the latest order win is within our assumption, hence there is no change to our forecasts. The stock is trading at 16x FY11 P/E (Mar YE) with dividend yield of about 5%. Our house’s TP for SIA Engineering is $4.21.
Market Pre-Open Updates
S&P 500 was down 6 points at 1115. It bounced ced higher off 1,100, its 200-day moving average, one of the most important technical indicators in any market. Nasdaq was off 19 points to 2,298.
US stocks pared heavy losses in late Wednesday session as the euro rallied 1.6% from a four-year low to 1.2393 on speculation European leaders will take steps to support the currency and following the release of positive US economic news.
The DJIA fell 67 points to 10,444 by the close after losing as much as 186 points earlier. The tech-rich Nasdaq Composite fell 19 points to 2,298 while the S&P 500 fell 6 points to 1,115. At the close, both the Dow and the Nasdaq had climbed back into positive territory for the year, while the S&P 500 stayed flat where it ended 2009. The broad market benchmark briefly skirted below its 200-day moving average before rebounding off the key technical support, setting a floor under its recent drop.
As the impact of the eurozone crisis sunk in, there were concerns about the effect on US firms especially those with heavy exposure to Europe. The Dow's industrial stocks were most badly hit with the sector off almost 2%. Shares of heavy machinery maker Caterpillar slid 2.8%.
Stock indices barely budged after the Fed upgraded its growth forecasts for this year on signs of a strengthening economic recovery, predicting growth would hit between 3.2-3.7% this year, up from 2.8-3.5% estimate made in January. Data also showed the US Apr CPI fell for the first time in a year and the closely watched core inflation rate eked out its smallest annual gain since 1966, further supporting the Fed's vow to keep interest rates low for some time
However, an industry report released separately showed demand for loans to buy homes sank 27.1% to a 13-year low last week after the expiry of a home buyers tax credit. A record share of home loans were also in foreclosure, suggesting a recovery in housing will be painfully slow.
US stocks pared heavy losses in late Wednesday session as the euro rallied 1.6% from a four-year low to 1.2393 on speculation European leaders will take steps to support the currency and following the release of positive US economic news.
The DJIA fell 67 points to 10,444 by the close after losing as much as 186 points earlier. The tech-rich Nasdaq Composite fell 19 points to 2,298 while the S&P 500 fell 6 points to 1,115. At the close, both the Dow and the Nasdaq had climbed back into positive territory for the year, while the S&P 500 stayed flat where it ended 2009. The broad market benchmark briefly skirted below its 200-day moving average before rebounding off the key technical support, setting a floor under its recent drop.
As the impact of the eurozone crisis sunk in, there were concerns about the effect on US firms especially those with heavy exposure to Europe. The Dow's industrial stocks were most badly hit with the sector off almost 2%. Shares of heavy machinery maker Caterpillar slid 2.8%.
Stock indices barely budged after the Fed upgraded its growth forecasts for this year on signs of a strengthening economic recovery, predicting growth would hit between 3.2-3.7% this year, up from 2.8-3.5% estimate made in January. Data also showed the US Apr CPI fell for the first time in a year and the closely watched core inflation rate eked out its smallest annual gain since 1966, further supporting the Fed's vow to keep interest rates low for some time
However, an industry report released separately showed demand for loans to buy homes sank 27.1% to a 13-year low last week after the expiry of a home buyers tax credit. A record share of home loans were also in foreclosure, suggesting a recovery in housing will be painfully slow.
Wednesday, May 19, 2010
Oceanus
DMG cuts Oceanus target price to $0.43 from $0.515 based on 12.8X FY11 P/E after lowering FY11 earnings forecast by 30% to assume lower selling prices. Notes 1Q10 average selling price was down 33% on-quarter and supply of caged abalone lower due to higher-than-expected mortality rate. Adds restaurant business, comprising 20 restaurants across China, Singapore, continues to bleed due to high rental costs. Expects restaurant business to lose Rmb11-13m in next two years.
But still keeps Buy call citing recent purchase of two land parcels will enable Oceanus to increase number of tanks to 35,000 by end-FY10 from 25,055 now, allowing it to rear bigger abalones with higher profit margins.
But still keeps Buy call citing recent purchase of two land parcels will enable Oceanus to increase number of tanks to 35,000 by end-FY10 from 25,055 now, allowing it to rear bigger abalones with higher profit margins.
United Fiber System
United Fiber System announced plans to acquire PT Kutai Chipmill for US$65m. Kutai is principally engaged in producing & exporting woodchip as raw material for pulp in Balikpapan, East Kalimantan with designed capacity of 700k tpa. To help fund the acquisition, UFS will issue 3.56bn shares, representing 53% of its enlarged share cap for S$178m to Falcon Capital Global, of which US$65m will be used for the planned acquisition, US$20m for expansion of its woodchip biz the rest for working capital
Falcon will be seeking a waiver from the SIC from having to make a GO. UFS has had a poor history of executing its projects and we are not overly excited on this latest development.
Falcon will be seeking a waiver from the SIC from having to make a GO. UFS has had a poor history of executing its projects and we are not overly excited on this latest development.
*Technical* Ezra
*Technical* Ezra is trending is a downside momentum.. Price level at 2.03 may be tested as Resistance. It broke below the previous low at 1.91. Next support may be tested at 1.70 Short-term osscillators are very oversold.
CapitaLand
CapitaLand off 0.6% at $3.59 in light trade. Stock is stock down as much 18% since mid-Apr peak of $4.25, hurt largely by concerns over developer's exposure in China but selling pressure may be easing as volume tapering off in recent sessions. Citigroup, which has Buy call with $4.34 target, believes concerns over sales slowdown in China overdone with current valuation at 1.1x P/B.
Even if all its listed subsidiaries and associates are marked to market and zero surpluses attributed for its residential sites in China and Singapore, the stock should still be worth $3.70.
Even if all its listed subsidiaries and associates are marked to market and zero surpluses attributed for its residential sites in China and Singapore, the stock should still be worth $3.70.
*Technical* Otto Marine
*Technical* Otto Marine breakdown below the 200-Day EMA at 0.43 .More downsides may be coming. Momentum is weak with the next support at 0.405
HL Asia
HL Asia hit by some broker downgrades due to more challenging prospects for China units Xinfei and Yuchai; expect rising raw material costs and rising inventory levels at the distributors to erode margins of Yuchai and Xinfei for the rest of the year as demand is projected to slow amid credit tightening and a weaker property market in China. Stock is still in a downleg, $3.26 would be better entry level.
United Envirotech
United Envirotech announced its FY10 net profit surged by 305.4% YoY to S$14.9m while revenue jumped 61.3% to S$69.1m. The strong performance was mainly driven by higher contributions from both its engineering and wastewater treatment businesses. Due to its strong operating casfh flow, the company has proposed a final div of 0.3c and a special div of 0.2c, which implies total payout ratio of 14.7%.
Going fwd, the co expects its wastewater treatment capacity to double in the next 2 yrs, which will enable United Env to take on bigger projects. Based on Bloomberg estiamtes, the stock trades at less than 6x FY11 P/E (Mar YE).
Going fwd, the co expects its wastewater treatment capacity to double in the next 2 yrs, which will enable United Env to take on bigger projects. Based on Bloomberg estiamtes, the stock trades at less than 6x FY11 P/E (Mar YE).
*Technical* STI
*Technical* STI dipped abt -32pts. On the daily chart, it is trading below the price level 2860 ; next critical support to lookout is near 2740 price level (200-days EMA)
China Fishery
China Fishery announced yesterday the acquisition of a Peruvian fishmeal company, Pesquera Alejandria SAC for US$95m. Through the acquisition, which was carried out through CFG's sub Epesca Pisco SAC, CFG will gain access to Alejandria's steam-dried fishmeal processing facility. This will boost CFG fishing quote of the annual allowable catch of Peruvian anchovy to 6.05% and 10.91% in northern and southern Peru, respectively.
In addition, the group will be able to further increase its mkt share in the Peruvian fishing industry, making it the 6th largest fishmeal co in Peru in terms of the production volume of fishmeal. The acquisition is expected to be completed by 24 May 10. Based on Bloomberg estimates, China Fishery currently trades at about 9.1xFY10 and 7.8x FY11 P/E.
In addition, the group will be able to further increase its mkt share in the Peruvian fishing industry, making it the 6th largest fishmeal co in Peru in terms of the production volume of fishmeal. The acquisition is expected to be completed by 24 May 10. Based on Bloomberg estimates, China Fishery currently trades at about 9.1xFY10 and 7.8x FY11 P/E.
Viking O&M
Viking O&M announced that it has sold 20m shares in Tung Lok Restaurants and 10.3m shares in Old Chang Kee to Goodview Properties for a total consideration of S$6.99m in cash. According to mgtm, the sales proceeds will mainly be used for potential M&As and repayment of existing loans. Consequently, Viking will record a net gain S$2.93m from the stake sale. Based on our ball-park estimates, the stock trades at about 8x FY10 P/E (including the gains on disposal).
Wilmar Update 1
According to reports by The Jakarta Post & Jakarta Globe, Wilmar is being investigated for tax fraud involving Rp3.6tr (US$385m). The tax authorities alleged that the palm oil giant conducted fictional transactions, fabricated financial reports and arranged bogus transfer pricing to receive tax refunds from the Indon govt.
As expected, Wilmar has categorically denied the allegations that it made VAT restitution claims that were questionable and fictitious and denied any collusion with tax officials. If the claims were substantiated, there would be material impact on Wilmar’s earnings as the total restitution of US$385m for 2007-2009 accounts for 21% of its net profit. Under Indon tax law, the Tax Directorate can impose a penalty of up to 4x the outstanding amount. yeosayann :
We expect a knee-jerk reaction to Wilmar’s share price today, which might also put a cloud on the other Indon palm oil players as well. Until this scandal clears, CL has downgraded to the stock to Underperform and cut its TP to from $6.88 to $5.70, which is also its technical support.
As expected, Wilmar has categorically denied the allegations that it made VAT restitution claims that were questionable and fictitious and denied any collusion with tax officials. If the claims were substantiated, there would be material impact on Wilmar’s earnings as the total restitution of US$385m for 2007-2009 accounts for 21% of its net profit. Under Indon tax law, the Tax Directorate can impose a penalty of up to 4x the outstanding amount. yeosayann :
We expect a knee-jerk reaction to Wilmar’s share price today, which might also put a cloud on the other Indon palm oil players as well. Until this scandal clears, CL has downgraded to the stock to Underperform and cut its TP to from $6.88 to $5.70, which is also its technical support.
Pre Market Open Update
*The Dow suffers its third loss of 100 points or more in four days after Germany says it will ban naked short-selling; the euro falls to $1.22. DJI broke below the price level at 10600 (100-EMA). Next critical support at 10260
US stocks tumbled last night in choppy trade as the European debt crisis continued to cast a pall over the market with Germany announcing plans to ban "naked" short-selling of 10 banks, certain euro-zone bonds and credit default swaps. The euro plunged to a new four-year low of below US$1.22, oil erased a 3.5% advance to settle below US$70 a barrel on concerns the impact of the eurozone austerity measures on consumer consumption.
The DJIA slumped 115 points or 1.08% to 10,511 as the blue-chip index erased an early gains triggered by better-than-estimated housing starts and Wal-Mart results. The tech-rich Nasdaq Composite fell 37 points or 1.6% to 2,317 while the broad-market S&P 500 slipped 16 points or 1.4% to 1,121. The S&P 500 ended just below 1,121, which had served as a support level marking the 50% Fibonacci retracement of the decline from its peak in late 2007 to a 12-year low in Mar 09. In the past 11 weeks, the benchmark index has mostly traded in a band between 1,121 and below 1,228, the 61.8 Fibonacci retracement of that move. Among US stocks in focus was global retail giant Wal-Mart, rising 1.85% after it achieved a record net profit of US$3.32bn in 1Q10 on the back of strong sales abroad. Banking stocks were hit, Goldman Sachs, BoA and JPMorgan all lost at least 2% to pace declines in 78 of 79 financial shares in the S&P 500.
Shares of technology companies, which tend to rely heavily on overseas sales, were also among the biggest losers. An index of semiconductor shares .SOXX lost 2.9% while Intel Corp dropped 2.7%. But there was a bright spark after the closing bell when HP reported results that beat expectations on good demand for personal computers and servers and raised its full-year earnings outlook. HP's stock rose 2.5% in extended trade.
US stocks tumbled last night in choppy trade as the European debt crisis continued to cast a pall over the market with Germany announcing plans to ban "naked" short-selling of 10 banks, certain euro-zone bonds and credit default swaps. The euro plunged to a new four-year low of below US$1.22, oil erased a 3.5% advance to settle below US$70 a barrel on concerns the impact of the eurozone austerity measures on consumer consumption.
The DJIA slumped 115 points or 1.08% to 10,511 as the blue-chip index erased an early gains triggered by better-than-estimated housing starts and Wal-Mart results. The tech-rich Nasdaq Composite fell 37 points or 1.6% to 2,317 while the broad-market S&P 500 slipped 16 points or 1.4% to 1,121. The S&P 500 ended just below 1,121, which had served as a support level marking the 50% Fibonacci retracement of the decline from its peak in late 2007 to a 12-year low in Mar 09. In the past 11 weeks, the benchmark index has mostly traded in a band between 1,121 and below 1,228, the 61.8 Fibonacci retracement of that move. Among US stocks in focus was global retail giant Wal-Mart, rising 1.85% after it achieved a record net profit of US$3.32bn in 1Q10 on the back of strong sales abroad. Banking stocks were hit, Goldman Sachs, BoA and JPMorgan all lost at least 2% to pace declines in 78 of 79 financial shares in the S&P 500.
Shares of technology companies, which tend to rely heavily on overseas sales, were also among the biggest losers. An index of semiconductor shares .SOXX lost 2.9% while Intel Corp dropped 2.7%. But there was a bright spark after the closing bell when HP reported results that beat expectations on good demand for personal computers and servers and raised its full-year earnings outlook. HP's stock rose 2.5% in extended trade.
Tuesday, May 18, 2010
Breaking news on Wilmar
Jakarta Globe, A company controlled by one of the world’s richest men, Indon’s Martua Sitorus, is being investigated by the House of Representatives in relation to a major tax fraud scandal that could have cost the country US$187m.
The case also involves allegations that Wilmar Int'l, colluded with two senior officials from the corruption-plagued Directorate General of Taxation.
Golkar lawmaker Bambang Soesatyo, a member of the House Commission III for law and legislation working committee overseeing the investigation of civil servants, told the Jakarta Globe that it was investigating Wilmar
Bambang said the initial allegations were contained in an internal tax directorate report that alleged that Wilmar committed a number of fictional transactions and manipulated financial statements to earn the tax restitutions.
The report also suggested that there was an unsettled tax case involving subsidiary PT Wilmar Nabati Indonesia worth Rp500bn, including indications of bribery involving as much as Rp40bn.
For a full read: http://www.thejakartaglobe.com/politics/house-investigates-fresh-allegations-involving-tax-directorate/375606
The case also involves allegations that Wilmar Int'l, colluded with two senior officials from the corruption-plagued Directorate General of Taxation.
Golkar lawmaker Bambang Soesatyo, a member of the House Commission III for law and legislation working committee overseeing the investigation of civil servants, told the Jakarta Globe that it was investigating Wilmar
Bambang said the initial allegations were contained in an internal tax directorate report that alleged that Wilmar committed a number of fictional transactions and manipulated financial statements to earn the tax restitutions.
The report also suggested that there was an unsettled tax case involving subsidiary PT Wilmar Nabati Indonesia worth Rp500bn, including indications of bribery involving as much as Rp40bn.
For a full read: http://www.thejakartaglobe.com/politics/house-investigates-fresh-allegations-involving-tax-directorate/375606
F&N
BNP keeps Buy call and raises F&N target price to $5.48 from $4.52, pegged at 20% discount to RNAV valuation of $6.85, reflecting higher selling prices of its residential properties, increased earnings assumptions for F&B operations. Notes F&N has accumulated unrealised property sales, estimated at $1.9bn, which will support earnings in next 2-3 years; group also turning focus to extract value from its little-known but large land bank in China and Australia.
*Technical* Otto Marine
*Technical* Otto Marine is trading in a tight range 0.455 - 0.430 . A breakout on either side will determine its momentum in the short term.
TTJ Holdings
TTJ Holdings just announced that its wholly-owned subsidiary, TTJ Design and Engineering Pte Ltd, has secured new contracts amounting to about S$31.3m. These orders relate mainly to the supply, fabrication and installation of structural steelworks for various ongoing projects in S'pore. These include the Marina Bay Sands IR, a petrochemical project in Jurong Island, MRT Downtown Line 2 and a number of public sector projects. Mtgm expects these contracts to be completed by end 2012.
Sound Global (former Epure)
Sound Global (former Epure) +7.7% to 2-week high of S$0.84 in active trade as sharp improvement in 1Q10 results fuels hopes earnings momentum will remain strong in coming quarters. While 1Q seasonally weakest quarter for China-based water treatment firm, net profit rose 2.5x to Rmb45.5m vs Rmb18.2m year earlier as revenue jumped 74% to Rmb234m. Despite China's credit tightening, the group managed to secure US$600m credit line from China Merchants Bank to finance capital-intensive BOT projects. Expect stronger 2H with more contract flows. Share price supported by proposed dual listing in HK. Immediate resistance at $0.90.
*Technical* Keppel Land
*Technical* Keppel Land is still moving in an uptrend but it has broke below the short term 50-days EMA . Support level 3.49 may be tested. Current Resistance at 3.70
Unifiber :(
Unifiber has been issuing new shares as part payment for its US$15m Equity Line Backed Loan Note
Golden Agri
Food giant Nestle may resume buying palm oil from Indon giant Sinar Mas if an independent audit clears the firm of allegations that it is devastating rainforests. The world's largest food company dropped Sinar Mas as a supplier in March following protests by environmental group Greenpeace, after Unilever also severed ties this year. The ongoing audit is due for completion by end June and if cleared, it will lift the cloud over Sinar Mas’ plantation unit Golden Agri.
*Technical* Golden Agri is trading between the range 0.55 and 0.513 . Momentum may improve if price breakup above 0.55 (100-days EMA) . The MACD staged a crossover at the oversold level.
*Technical* Golden Agri is trading between the range 0.55 and 0.513 . Momentum may improve if price breakup above 0.55 (100-days EMA) . The MACD staged a crossover at the oversold level.
Hong Leong Asia
DBSV downgrades Hong Leong Asia to Hold, cuts TP to $4.54 from $5.67 after reducing earnings forecasts for both FY10-11 by 19% to assume lower revenue growth, margins for China units Xinfei, Yuchai amid challenging prospects; expect rising raw material costs and rising inventory levels at the distributors to erode margins of Yuchai and Xinfei for the rest of the year as demand is projected to slow amid credit tightening and a weaker property market in China.
*Technical* Olam
*Technical* Olam broke below the price level at 2.48 and may be moving towards the downside with a test of support at 2.37 (yesterday's low)
Ying Li
Revised target price to $0.78. The co posted a net loss of RMB13.5m in 1Q10 due mainly to the absence of property sales revenue. Phase II sales at San Ya Wan only come in 2H10. Net profit will stay muted in FY10 until the pre-sales of the IFC and Da Ping projects take off at end-2010. We lower our TP to $0.78 from $1.04 to factor in lower ASP and rental assumptions. Near term catalysts: the signing of retail tenancy agreements at the IFC & bidding outcome for the Wuyi land parcel Jun 10.
JPM has also initiated coverage Ying Li with a Neutral rating and PT of $0.60 based on 25% discount to RNAV, citing that the Chongqing property developer is transiting to hold at least 60% of its commercial properties under development for recurring income, which is expected to reach Rmb400m in 2014 from Rmb44m last year. The group plans to complete 190k sqm of NLA annually over the next 5 years, up from 65k sqm p.a. in the past 5 years.
There is a long term intention to set up a Reit for its rental portfolio. The stock is trading at 50% discount to RNAV vs 45% for its Chinese peers. Backed by 1.1m sqm landbank, of which 52% is in prime CBD area, upside risks include potential plot ratio increase for its San Ya Wan project. Key dampeners are continued policy/tax, financial and execution risks.
JPM has also initiated coverage Ying Li with a Neutral rating and PT of $0.60 based on 25% discount to RNAV, citing that the Chongqing property developer is transiting to hold at least 60% of its commercial properties under development for recurring income, which is expected to reach Rmb400m in 2014 from Rmb44m last year. The group plans to complete 190k sqm of NLA annually over the next 5 years, up from 65k sqm p.a. in the past 5 years.
There is a long term intention to set up a Reit for its rental portfolio. The stock is trading at 50% discount to RNAV vs 45% for its Chinese peers. Backed by 1.1m sqm landbank, of which 52% is in prime CBD area, upside risks include potential plot ratio increase for its San Ya Wan project. Key dampeners are continued policy/tax, financial and execution risks.
SIA
SIA posted continued strong load factor numbers for April 2010, while the disruption caused by volcanic ash from the Eyjafjallajökull volcano has not been very significant. April passenger load factors were up 5.4 pts YoY to 77.6 with capacity reduction capped at 4.2%. Passenger traffic growth was also steady at 2.9% YoY which was impacted by the European disruptions. The Americas showed a sharp rebound, with the sector’s load factor up 13 pts YoY...
US summary
US stocks ended slightly higher on Monday after staging a late comeback from big losses on bargain hunting and short covering. The rebound came in the final hour as the euro recovered after sinking to a four-year low US$1.2235 amid fears that efforts to tackle the euro-zone debt crisis could stifle global growth.
The DJIA, down 180 points at one stage, edged up 5.67 points to 10,626, ending a two-session streak of triple-digit losses. The tech-rich Nasdaq Composite rose 7.38 points to 2,354 while the broad-market S&P 500 climbed 1.26 points to 1,137.
Adding to apprehension over the still fragile recovery, the Empire State Manufacturing Survey showed conditions for manufacturers improving in May for the 10th straight month, but at a slower pace than in April while the index of general business conditions dropped 12.8 points to 19.1 in May, its lowest level since Jan and far below the 30-point reading expected by most analysts.
The DJIA, down 180 points at one stage, edged up 5.67 points to 10,626, ending a two-session streak of triple-digit losses. The tech-rich Nasdaq Composite rose 7.38 points to 2,354 while the broad-market S&P 500 climbed 1.26 points to 1,137.
Adding to apprehension over the still fragile recovery, the Empire State Manufacturing Survey showed conditions for manufacturers improving in May for the 10th straight month, but at a slower pace than in April while the index of general business conditions dropped 12.8 points to 19.1 in May, its lowest level since Jan and far below the 30-point reading expected by most analysts.
Monday, May 17, 2010
*Technical* YangZijiang
*Technical* YangZijiang broke below the channel pattern. Next support will be tested at 1.21 (100-days EMA) ; Resistance at 1.36 (previous high) . RSI is below neutral level.
Prudential listing
The secondary listing of Prudential Shares on the SGX-ST is expected to become effective on 25 May 2010. Trading commences 10 a.m.
Noble Grp
Noble Grp is acquiring the refined oil product business of Northville Product Svcs, a unit of petroleum & renewable fuels trading company, NIC Holdings Corp for US$70m in cash plus US$10m in convertible promissory notes due 2011 upon completion of the deal, expected in early June.
With the acquisition of NPS assets, Noble will have a significant presence in the US MidCont/Gulf Coast oil & gas platform and boost its storage capacity by another 3.7m bbls to 6m bbls as well as gain access to supply contracts with key US Gulf Coast refiners and wholesale marketing in pipeline systems.
The deal is in line with the group’s asset-medium strategy and supports its US ethanol, gasoline and distillates business Noble has highlighted that its looking to add oil and gas distribution in the US, and sees opportunities to buy agriculture assets like ports, storage, processing units and palm oil plantations. Share price support is at $1.71.
With the acquisition of NPS assets, Noble will have a significant presence in the US MidCont/Gulf Coast oil & gas platform and boost its storage capacity by another 3.7m bbls to 6m bbls as well as gain access to supply contracts with key US Gulf Coast refiners and wholesale marketing in pipeline systems.
The deal is in line with the group’s asset-medium strategy and supports its US ethanol, gasoline and distillates business Noble has highlighted that its looking to add oil and gas distribution in the US, and sees opportunities to buy agriculture assets like ports, storage, processing units and palm oil plantations. Share price support is at $1.71.
*Technical* Yingli
*Technical* Yingli dipped abt 28% since 16 April and may be testing the low at 0.415. Short-term oscillators are at oversold level. Resistance at 0.455
Mid Day Review
Singapore stocks remain weak tracking losses in rest of Asia. STI down 1.2% at 282 midday; immediate supports at 2800 & 2775. Market breadth at 7 decliners for each gainer. The biggest risk for Asia lies in the economic impact of a possible recession in Europe. Small, highly export-dependent countries like Spore would be impacted the most if recession occurs; stocks with significant revenue or currency exposure to Europe include HTL Int'l, Petra Foods, SATS, CSE Global, SIA, ComfortDelgro, NOL.
2 cents opinion
All major indices are pointing south.
Likely ST Index will revisit 2780 and test 2720. Final leg should be at 2650. Traders can note these levels. Investor better stay out till coast is clear around Jul. The corporate reporting season is coming to and end and not muct excitement to sustain momentum going forward.
Likely ST Index will revisit 2780 and test 2720. Final leg should be at 2650. Traders can note these levels. Investor better stay out till coast is clear around Jul. The corporate reporting season is coming to and end and not muct excitement to sustain momentum going forward.
ST Engineering (Contract Win)
ST Engineering just announced that its electronics arm, ST Electronics, has been awarded a contract worth about S$4.6m by Changchun Railway Vehicles Co (CRC). ST Electronics will provide the Passenger Information Systems (PIS) for the Rio De Janeiro metro vehicles, a project awarded to CRC by Concessao Metroviaria Do Rio De Janeiro SA. Work on the project commences immediately and will be completed by the end-2014.
HL Asia
Hong Leong Asia slid 3.8% to $4.08 on concerns earnings growth in coming quarters may slow due to China's recent tightening measures. The company derives substantial portion of profits from China cautions that Beijing's bank lending curbs may stifle distributors' ability to carry its diesel engines, consumer goods like refrigerators. Rising raw material costs, higher minimum wages may also weigh on performance in coming quarters.
Guidance follows release of 1Q10 results which saw net profit +54% on-year to $35.9m as revenue +37% to $1.49bn. Company also warns proposed strategic review of Xinfei Group may not materialize in view of uncertainty arising from Europe''s debt problems. Hopes of HLA reaping windfall from potential Xinfei divestment largely behind stock's 46.2% gain since beginning 2010. Support at current month low of $3.98.
Guidance follows release of 1Q10 results which saw net profit +54% on-year to $35.9m as revenue +37% to $1.49bn. Company also warns proposed strategic review of Xinfei Group may not materialize in view of uncertainty arising from Europe''s debt problems. Hopes of HLA reaping windfall from potential Xinfei divestment largely behind stock's 46.2% gain since beginning 2010. Support at current month low of $3.98.
Result* F&N
Maintain HOLD. F&N reported 2Q10 net profit of $236m included a $26m fair value gain on investment properties injected into FCT and a $44m gain from dilution in interest in FCT. Adjusted for these items, 1H10 net profit of $306m formed 56% of our full year forecast. We keep our FY10 forecast and raise RNAV to $4.71 factoring in higher mark-to-market for APB. In our view, F&N Bhd (only13.5x PE) offers a more direct play.
*Result* AsiaTravel
*Result* AsiaTravel.com- maintain BUY - (TP=$0.62 reduced from $0.90): 1) Disappointing 2Q results come from weak sales from Thailand and Dubai with higher operating costs for new products. 2) Expect strong recover in 2H will come from Online Packaging Module with instant confirmation and new online B2B platform. 3) Removing our earnings estimates due to current uncertainties on the contributions from RWS. But AST is still a stronger player in the next tourism upturn with promising offerings.
*Result*Armstrong
Maintain BUY. Armstrong outperformed expectations in 1Q10 with a 70% jump in revenue and 916% YoY surge in net profit to $7.1m while gross margin almost exceeded the previous peak. Automotive led the way (+96% yoy) followed by Consumer Electronics and Data Storage (+58% yoy). With strong cash generation ( $3.7m in 1Q10 alone) Armstrong may improve its full year DPS of 1.6 cents (yld 4.2%). We raise our earning forecast by 10% to $22m. Our TP is @$0.48, pegged to 11x FY10 EPS.
*Result* SIAE
Maintain BUY. SIAE’s full year net profit of $236.1m (-9%) was assisted by a $6m gain from sale of fixed assets and an associate company’s tax writeback in 4Q. Adjusting for this, results were within expectations. Operating margin also jumped to a record 15.1% as operating expenses fell on the back of lower subcontract costs. TP raised to $4.21, based on 18x FY11 earnings vs. its peak valuation of 20x earnings. Dividend yield remains attractive (5.4% this year and 5.7% next year).
*Result* Comfort Delgro
Upgrade to BUY. Comfort delivered a consistent 1Q10 result. Net profit rose 3.4% YoY to $53.4m. A$ strength boosted revenue, offsetting RMB weakness. Growth came mainly from Australia bus, Singapore taxi and rail, as well as automotive engineering services, while underperformers were mainly the bus operations in Singapore, UK, China and China taxi. Expect a consistent earning growth 5%, TP @1.87 (17x FY Dec10 earnings vs. SMRT which is currently trading at 19x earnings)
*Otto Marine*
Otto Marine's 1Q10 net profit jumped by 274% YoY to $24.5m, largely due to significant recognition of shipbuilding order to its revenue. While 1Q may be an exceptional quarter, we believe that its higher-margin Chartering and Geophysical businesses would propel OM for the next leg of growth. We have tweaked our FY10 forecast to take into account the S$9m provision in relation to possible cancellation of one vessel.
Further, FY11-12 estimates have also been adjusted due to the timing differences in the confirmation of new charter contracts. Our new target price is $0.58, premised on SOTP valuation method.
Further, FY11-12 estimates have also been adjusted due to the timing differences in the confirmation of new charter contracts. Our new target price is $0.58, premised on SOTP valuation method.
*NOL*
*NOL* 1QFY10 net loss improved by 60% y/y and 53% q/q to US$98m. The performance was notably driven by improvement in the container shipping business in Europe and Intra Asia. Despite the economic problems in Europe, some of these pressures can be offset by the US Transpacific contract freight renewals in April-May this year, which have been pegged at rates that are 80-100% higher than last year based on anecdotal evidence.
Likelihood of a stronger quarterly results in 2QFY10 is high. NOL is currently trading at 1.5x P/B.
The ongoing trade recovery could justify 1.7x P/B, which would imply a fair value of $2.47.
*NOL Technicals* For the past 2 months, NOL was range‐bound within the decending channel but the recent breakout above the resistance indicates that the pullback may have come to an end with the the previous resistance now becoming a support.
• From the daily chart, momentum appears to be gaining strength in the near term with the RSI punching above the reading of 50.
Price action is rather flat over the past 2 trading days but it is still trading
above the 200‐day EMA suggesting more upside ahead.
• Immediate support level lies at $2.08 with overhead resistance
levels at $3.60 and $3.79
Likelihood of a stronger quarterly results in 2QFY10 is high. NOL is currently trading at 1.5x P/B.
The ongoing trade recovery could justify 1.7x P/B, which would imply a fair value of $2.47.
*NOL Technicals* For the past 2 months, NOL was range‐bound within the decending channel but the recent breakout above the resistance indicates that the pullback may have come to an end with the the previous resistance now becoming a support.
• From the daily chart, momentum appears to be gaining strength in the near term with the RSI punching above the reading of 50.
Price action is rather flat over the past 2 trading days but it is still trading
above the 200‐day EMA suggesting more upside ahead.
• Immediate support level lies at $2.08 with overhead resistance
levels at $3.60 and $3.79
Pre Market Updates
Dow falls 163 on European worries on Friday. Crude oil drops below $72. The euro plunges against the dollar. But U.S. retail sales and industrial production rise. DJI breached but closed above the 100-days EMA support level at 10609. Next critical support level at 10260
S&P/ASX200 is trading in a downtrend at 4532 (-82.70). Declines were led by Bhp Billiton, Commonwealth Bank and Anz Banking Group. Previous low at 4530 may be test in the near term with current resistance at 4630
*Technical* Nikkei225 dipped -140pts . It is below the support level at 10380 (200-days EMA) . Next near term support may be tested at 10130 ; Resistance 10550 (prior high)
S&P/ASX200 is trading in a downtrend at 4532 (-82.70). Declines were led by Bhp Billiton, Commonwealth Bank and Anz Banking Group. Previous low at 4530 may be test in the near term with current resistance at 4630
*Technical* Nikkei225 dipped -140pts . It is below the support level at 10380 (200-days EMA) . Next near term support may be tested at 10130 ; Resistance 10550 (prior high)
Friday, May 14, 2010
My 2 cents opinion
"you better watch out,
you better not cry,
you better not pout,
i'm telling you why,
TEDDY BEAR is coming to town..."
Closed your long position if you can. (2 cents worth opinion)
you better not cry,
you better not pout,
i'm telling you why,
TEDDY BEAR is coming to town..."
Closed your long position if you can. (2 cents worth opinion)
Banks’ Municipal Debt Trades Face Preliminary Probe, WSJ Says
May 14 (Bloomberg) -- U.S. regulators are exploring possible conflicts of interest for banks that sold municipal bonds and bet the securities would fail, the Wall Street Journal reported, citing unidentified people familiar with the matter.
The U.S. Securities and Exchange Commission and state authorities opened a preliminary probe into municipal credit- default swap trades by banks, the newspaper said. The inquiry seeks to determine whether banks used their own capital to bet against bonds they sold and if the practice was disclosed properly to buyers, the newspaper said.
The move comes as the SEC widens its investigation, started at least a year ago, into whether banks including Goldman Sachs Group Inc. and Morgan Stanley misled investors when selling mortgage-linked securities in the lead-up to the collapse of the subprime mortgage market and global credit crisis.
The agency has been looking for abuse "across the spectrum," enforcement chief Robert Khuzami said April 16, when the SEC accused Goldman of fraud in the sale of collateralized debt obligations. Goldman says it did nothing wrong.
The municipal bond investigation may not lead to any final action, the Wall Street Journal said. All the banks declined to comment on the SEC probe and a related inquiry by California, the report said.
The U.S. government goal of making financial companies better at absorbing losses has sparked regulations aimed at preventing banks from taking on so much risk they could threaten financial stability. The latest to be accepted -- a proposal by Maine Republican Senator Susan Collins -- will require that Citigroup Inc., Bank of America Corp. and other large U.S. banks comply with higher capital standards.
California
Last week California Treasurer Bill Lockyer asked six banks how much they earned by betting against the state’s bonds, according to the report. He sent letters to Bank of America Corp., Barclays Plc, Citigroup Inc., Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley, the newspaper said. In March, Lockyer questioned how the same banks marketed contracts used to bet against municipal bonds.
Clare Williams, Barclays Asia-Pacific spokeswoman, Rob Stewart, a Bank of America spokesman, and Citigroup’s Asian spokesman James Griffiths all declined to comment. E-mails to the other three banks seeking comment weren’t immediately returned.
The U.S. Securities and Exchange Commission and state authorities opened a preliminary probe into municipal credit- default swap trades by banks, the newspaper said. The inquiry seeks to determine whether banks used their own capital to bet against bonds they sold and if the practice was disclosed properly to buyers, the newspaper said.
The move comes as the SEC widens its investigation, started at least a year ago, into whether banks including Goldman Sachs Group Inc. and Morgan Stanley misled investors when selling mortgage-linked securities in the lead-up to the collapse of the subprime mortgage market and global credit crisis.
The agency has been looking for abuse "across the spectrum," enforcement chief Robert Khuzami said April 16, when the SEC accused Goldman of fraud in the sale of collateralized debt obligations. Goldman says it did nothing wrong.
The municipal bond investigation may not lead to any final action, the Wall Street Journal said. All the banks declined to comment on the SEC probe and a related inquiry by California, the report said.
The U.S. government goal of making financial companies better at absorbing losses has sparked regulations aimed at preventing banks from taking on so much risk they could threaten financial stability. The latest to be accepted -- a proposal by Maine Republican Senator Susan Collins -- will require that Citigroup Inc., Bank of America Corp. and other large U.S. banks comply with higher capital standards.
California
Last week California Treasurer Bill Lockyer asked six banks how much they earned by betting against the state’s bonds, according to the report. He sent letters to Bank of America Corp., Barclays Plc, Citigroup Inc., Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley, the newspaper said. In March, Lockyer questioned how the same banks marketed contracts used to bet against municipal bonds.
Clare Williams, Barclays Asia-Pacific spokeswoman, Rob Stewart, a Bank of America spokesman, and Citigroup’s Asian spokesman James Griffiths all declined to comment. E-mails to the other three banks seeking comment weren’t immediately returned.
ComfortDelgro
ComfortDelgro flat at $1.49 pending 1Q10 results due after market close. Investors will be keen to watch its costs in wake of rival SMRT's spike in operating expenses, which led to the train operator’s 41% drop in 1Q earnings. But ComfortDelgro's share price has not moved up as much as SMRT so the relative downside may not be as bad.
CapitaMalls Asia
[Dow Jones] CapitaMalls Asia +3% to 8-session high of $2.13, extending 5.1% gains so far this week, outperforming other blue chips. Interest possibly driven by DB conference held earlier this week where CMA was one of the participating companies. CMA's share price had been bashed down lately and investors may be realizing that China's property tightening measures is targeting the residential segment and not the retail side. So it could be a relief rally.
CMA, which has significant exposure in China, may also be a potential beneficiary of Rmb revaluation. Resistance tipped at 50-day MA at $2.23.
CMA, which has significant exposure in China, may also be a potential beneficiary of Rmb revaluation. Resistance tipped at 50-day MA at $2.23.
*New Contact* Swiber
Swiber just announced that it has secured a Letter of Award from a leading oil and gas operator in South East Asia. The scope of work comprises the transportation and installation of heavy structures. The contract sum will range between US$17m to US$27m depending on the options provided in the contract. The work will commence in 2Q012 and is expected to be completed in two months. With this latest contract win, we estimate the current order book for Swiber now stands at about US$856m.
HYflux Water Trust
HYflux Water Trust 1Q10 results weak, revenues fell 57% to $6.1m due to absence of EPC sales resulting in 80% plunge in net profit to a mere $1.2m. Distributable income of 1.16¢ per unit is down 19% qoq & below market estimates. Weak water treatment demand at industrial parks compunded by one-off seasonal factors. US$66m credit facility expiring in Feb 11, refinancing may carry higher interest spreads. Mgmt ruled out any acqusistions in near term.
The DPU support from sponsor has ended & with no kicker in sight, it will be difficult for HWT to sustain its 5.42¢ paid out in FY09. Likely to pay out 4.6-4.8¢ in FY10 translating to DPU yield of ~7%.
The DPU support from sponsor has ended & with no kicker in sight, it will be difficult for HWT to sustain its 5.42¢ paid out in FY09. Likely to pay out 4.6-4.8¢ in FY10 translating to DPU yield of ~7%.
Supercoffee
Supercoffee reported strong 1QFY10 results with net profit up 152% yoy to $15m. Core earnings accounted for 27% of our full year forecast; on track to deliver a record profit this year with core earnings expected to grow 38% yoy exluding any divestment gains.
Earnings out-performance was driven by strong top-line growth of 27% and better gross margin of 39.5% vs 31.2%. Consumer goods sales grew 22% due to higher sales in key Southeast Asian markets. Ingredient sales surged 111% due to strong demand for its soluble coffee powder and non-dairy creamer. The gross margin improvement was due to better cost control and production efficiency.
Mgmt remains confident of maintaining profitability on the back of growing demand for consumer goods in its key Southeast Asian markets and buoyant ingredient sales in China and Taiwan.
Earnings out-performance was driven by strong top-line growth of 27% and better gross margin of 39.5% vs 31.2%. Consumer goods sales grew 22% due to higher sales in key Southeast Asian markets. Ingredient sales surged 111% due to strong demand for its soluble coffee powder and non-dairy creamer. The gross margin improvement was due to better cost control and production efficiency.
Mgmt remains confident of maintaining profitability on the back of growing demand for consumer goods in its key Southeast Asian markets and buoyant ingredient sales in China and Taiwan.
Mid Day View
Asian stock markets were lower with Japanese exporters falling on the yen's recent strength, while shares in Thailand fell as clashes late Thursday between troops and anti-government protesters left several injured and one person dead. Japan's Nikkei 225 was down 1.6% while Australia's S&P/ASX 200 was 1.0% lower and South Korea''s Kospi Composite was down 0.1%. HK Hang Seng Index fell 0.8%, Taiwan's main index was down 0.3% and the Shanghai Composite was 0.4% lower. DJ Futures down 13 points.
Yangzijiang
We like YZJ for its healthy orderbook & good execution with no cancellation thus far. Trades at 10.6x foward p/e which is not too demanding. Chart observation, break of $1.38 will confirm uptrend, both Stochastics & MACD swinging to positive.
Banyan Tree
[Dow Jones] CIMB cuts Banyan Tree to Underperform on lower earnings expectations following meagre 2% 1Q net profit growth. Cuts earnings estimates by 15-19% in anticipation of lower Thailand room revenue and property sales. Lowered SOTP TP to $0.80 from $0.86. Anticipates further hotel room cancellations, slower forward bookings in Thailand with tourists staying away from holiday spots in Bangkok & Phuket.
Ausgroup
*Technical* Ausgroup is trading in a downtrend with a test of resistance @0.565 ; Support @ 0.535 . Oscillators are at the oversold level.
Yanlord
[Dow Jones] JPMorgan cuts Yanlord TP to $2.10 from $2.60 on weaker earnings expectations but maintains Overweight rating. Has reduced contract sales, core earnings estimates for FY2010-FY2012 by 16-34% in anticipation of potential weak sales in coming months. Sees headwind from downward revision in street estimates. Target price reduction based on 30% discount to RNAV.
Wilmar: Dropping but why?
Key risks to Wilmar 1) Gross margin falling from 16.5% to 12.12% due to weakness in benchmark oil prices and higher staff cost. 2) Expect a lower CPO price in 2H10 due to bumper soya harvest from South Americas while palm oil output recovers as the trees move into high production season 3) Funds remain concerned macro risk as Chinese government may intervene on food stables to reign in inflation
*Technical* - Wilmar is trading between the range 6.64 (resistance) and 6.24 (support). Momentum is weak. No signal of a reversal yet.
*Technical* - Wilmar is trading between the range 6.64 (resistance) and 6.24 (support). Momentum is weak. No signal of a reversal yet.
Parkway
*Technical* Parkway may test its price level at 3.20 ( 50-days EMA). If this level fails to hold, next support at 3.04. Resistance @ 3.37
Swiber
Swiber - Prospects of windfall gains from listing plans of its subsea services business on catalist board may mitigate any disappointment over its soft 1Q10 results. No other details disclosed. 1Q10 net profit down 18.1% on-year to US$8m on lower revenue, higher operating and finance costs. With prodn activity in offshore oil & gas sector picking up, outlook is positive. Company has secured $622m worth of contracts since Nov, which expected to start contributing to bottomline in coming qtrs.
Swiber is trading at FY10 p/e of 9.1x, in line with peers
Swiber is trading at FY10 p/e of 9.1x, in line with peers
Hang Seng
*Hang Seng* The HSI opened on the weak side this morning -1% (20205). There were some concerns yesterday of a reshuffling of the HSI constituents. To thisl, the Hang Seng Indexes Company Limited has announced after market close yesterday that there is no change in the constituents for the Hang Seng Index . The Freefloat adjusting factor changes for this round include Bank of East Asia (23) (from 85% to 80%) and Esprit (330) (from 85% to 90%).
Meanwhile, there will be changes to the composition of HSCEI where China Pacific Insurance (2601) and China Longyuan (916) will be added, with effect from 7 June 2010. Zhejiang Expressway (576) and Shanghai Electric (2727) will be removed as HSCEI constituents with the same effective day. These changes are within market expectation.
Meanwhile, there will be changes to the composition of HSCEI where China Pacific Insurance (2601) and China Longyuan (916) will be added, with effect from 7 June 2010. Zhejiang Expressway (576) and Shanghai Electric (2727) will be removed as HSCEI constituents with the same effective day. These changes are within market expectation.
TrumpDragon
*Technical* TrumpDragon apprears to have floored at 0.74 support level and uptrend remains intact. Stock is also trading above the 100-day EMA. RSI is gaining momentum. Resistance@0.815 ; Support@0.735
BreadTalk
*Result* Despite sustaining its double-digit revenue growth, BreadTalk's 1Q10 net profit fell by 64% to $0.784m mainly due to underperformance of its PRC food court operations, start-up costs for Ramen Play business and Carl's Junior, and higher tax rates. BreadTalk's 1Q10 earnings missed our expectations, accounting for only 6% of our earnings forecast. We are currently reviewing our earnings estimates/ recommendation. More to follow after briefing.
Genting
1Q10 results of Genting Singapore masks strong underlying performance. Net loss of $396.3m was attributable to an impairment loss of $478.1m relating to its UK casino operations. Stripping this out, the group would have recorded a net profit of $81.8m comprising IR (RWS) EBITDA of $109m, which included $70m in pre-operating expenses and $16.7m from its UK operations. Core RWS EBITDA came in at $179m, which is ahead of $600-700m consensus estimates for FY10 and yielding core margins of over 50%.
Revenue for 1Q10 more than quadrupled to $460m from $105.4m a year earlier. The big boost in revenue came from RWS and better 'luck factor' from its UK casino operations. RWS reported revenue of $335m, of which gaming comprised 85%. This implies gaming revenue per day of >$6m, which higher than market estimates. This is a very good start for Genting Spore and the key upside risks would include a speedier ramp up of its gaming tables and higher occupancies at its hotels (currently at 50%).
Genting Spore +1.5¢ to $0.99 as investors look beyond gaming group's headline 1Q10 $396m loss to Resorts World Sentosa's growth potential. UBS, which has Neutral call with $0.99 TP believes $478.1m impairment charge for UK operations not relevant to Genting's fundamental valuation as impairment just reflects company's initial over-payment for its UK acquisitions. JPM has $1.35 TP, Cimb $1.38, DBSV $1.20. Only Citi has sell call with $0.65 TP.
Watch the $0.975 level; will need a sustained move above $0.975 to take the stock higher
Revenue for 1Q10 more than quadrupled to $460m from $105.4m a year earlier. The big boost in revenue came from RWS and better 'luck factor' from its UK casino operations. RWS reported revenue of $335m, of which gaming comprised 85%. This implies gaming revenue per day of >$6m, which higher than market estimates. This is a very good start for Genting Spore and the key upside risks would include a speedier ramp up of its gaming tables and higher occupancies at its hotels (currently at 50%).
Genting Spore +1.5¢ to $0.99 as investors look beyond gaming group's headline 1Q10 $396m loss to Resorts World Sentosa's growth potential. UBS, which has Neutral call with $0.99 TP believes $478.1m impairment charge for UK operations not relevant to Genting's fundamental valuation as impairment just reflects company's initial over-payment for its UK acquisitions. JPM has $1.35 TP, Cimb $1.38, DBSV $1.20. Only Citi has sell call with $0.65 TP.
Watch the $0.975 level; will need a sustained move above $0.975 to take the stock higher
*Contract win*
SATS’ subsidiary SFI has won a $5.5m high profile catering services contract for the 2010 Singapore Youth Olympic Games . SFI will develop a meal ordering system, manage/prepare all meal requirements for 7,000 athletes, officials and volunteers. The project will SATS’ full range of catering capabilities, from its cook-chill capabilities to vegetable and fruit processing as well as logistics/operational planning competencies in mass catering...
Note that in addition to this event, SATS/SFI has also done catering for the F1 events, specifically in catering for the VIP planes as well as the National Day celebrations. We believe SATS is well-positioned to access additional growth opportunities in the hospitality and tourism sectors. Maintain BUY with a target price of $3.30.
Note that in addition to this event, SATS/SFI has also done catering for the F1 events, specifically in catering for the VIP planes as well as the National Day celebrations. We believe SATS is well-positioned to access additional growth opportunities in the hospitality and tourism sectors. Maintain BUY with a target price of $3.30.
Wing Tai
*Result*
Wing Tai reported 9M10 net profits of $91.8m, slightly below expectations as profit recognition from residential projects were slower than expected. However, YTD earnings improved by 23% on the back of profit recognition from Riverine and Belle Vue. Riverine has obtained its TOP in April and the 60%-sold Belle Vue is likely to follow suit in around June. We expect these projects to contribute more meaningfully in the 4Q....
Wing Tai’s unsold landbank stands at an attributable GFA of about 820,000 sq ft, about 73% of which is in the high-end segment (ASP >$1,800 psf). We believe that its current 15% discount to book value is unwarranted, when its projects are expected to be profitable. Reiterate BUY ,target price of $2.50, pegged at a 10%-discount to RNAV.
Wing Tai reported 9M10 net profits of $91.8m, slightly below expectations as profit recognition from residential projects were slower than expected. However, YTD earnings improved by 23% on the back of profit recognition from Riverine and Belle Vue. Riverine has obtained its TOP in April and the 60%-sold Belle Vue is likely to follow suit in around June. We expect these projects to contribute more meaningfully in the 4Q....
Wing Tai’s unsold landbank stands at an attributable GFA of about 820,000 sq ft, about 73% of which is in the high-end segment (ASP >$1,800 psf). We believe that its current 15% discount to book value is unwarranted, when its projects are expected to be profitable. Reiterate BUY ,target price of $2.50, pegged at a 10%-discount to RNAV.
Olam
*Result*
Olam announced result pretty much in-line with expectation. 3Q10 revenue was up 19% yoy to $7.3b, while net profit excluding exceptional gain was up 34.2% to $83.8m. On the back of a record 2Q10, this means 9M2010 net profit has grown 37%. Net profit margin has expanded from 2% to 2.3%...
However, as we previously mentioned - the focus is still on the cash conversion cycle which indeed lengthened from 105 days to 128 due to higher value of inventories as price of cocoa and cotton increased substantially during the period. Associate performance also remains weak. Therefore we expect price to be soften from the current high level PER of 21x FY10.
DB issues Sell rating on Olam with $2.10 target, less upbeat as Olam's high valuations already discount the positives and the M&A angle overplayed. Excluding exceptional gains in both 3Q10 & 3Q09, core net profit for 1Q10 rose 34.2% on year to $83.8m on improvement in all 4 business segments.
*Technical* -Olam is above the 200-days EMA suggesting uptrend is still intact. Resistance 2.57 ; Support @ 2.40 may be tested in the near term.
Olam announced result pretty much in-line with expectation. 3Q10 revenue was up 19% yoy to $7.3b, while net profit excluding exceptional gain was up 34.2% to $83.8m. On the back of a record 2Q10, this means 9M2010 net profit has grown 37%. Net profit margin has expanded from 2% to 2.3%...
However, as we previously mentioned - the focus is still on the cash conversion cycle which indeed lengthened from 105 days to 128 due to higher value of inventories as price of cocoa and cotton increased substantially during the period. Associate performance also remains weak. Therefore we expect price to be soften from the current high level PER of 21x FY10.
DB issues Sell rating on Olam with $2.10 target, less upbeat as Olam's high valuations already discount the positives and the M&A angle overplayed. Excluding exceptional gains in both 3Q10 & 3Q09, core net profit for 1Q10 rose 34.2% on year to $83.8m on improvement in all 4 business segments.
*Technical* -Olam is above the 200-days EMA suggesting uptrend is still intact. Resistance 2.57 ; Support @ 2.40 may be tested in the near term.
Ezion
(8:53:53 AM) : Ezion’s 1Q10 earnings grew by 133% to $7.7m, on the back of 75% revenue growth to $25.5m. The strong YoY growth was driven by its chartering and offshore support vessels, due to firmer rates as well as additional vessels. This also includes some contributions from the first liftboat. Excluding the extraordinary gains, core earnings are still projected to grow by 125%. Notably, associate earnings also contributed some $2m in earnings as the first earnings from its Gorgon venture kicks in.
Going forward, Ezion’s FY10 earnings will be further driven by revenues from its 3rd and 4th liftboat from 3Q and 4Q respectively, as well as from its contract for Gorgon. Ezion’s 3-yr earnings CAGR of 62.4% p.a. looks intact, with potentially more upside from new ventures in Western Australia. KE maintain our Buy recommendation with target price of $0.99, based on core earnings PEG of just 0.25x.
*Technical* Ezion surged abt 10% over the past 6 trading days. Price level at 0.70 may be tested as support. Short-term resistance @ 0.73. A breakdown below 0.70 indicates a deeper correction is underway.
Going forward, Ezion’s FY10 earnings will be further driven by revenues from its 3rd and 4th liftboat from 3Q and 4Q respectively, as well as from its contract for Gorgon. Ezion’s 3-yr earnings CAGR of 62.4% p.a. looks intact, with potentially more upside from new ventures in Western Australia. KE maintain our Buy recommendation with target price of $0.99, based on core earnings PEG of just 0.25x.
*Technical* Ezion surged abt 10% over the past 6 trading days. Price level at 0.70 may be tested as support. Short-term resistance @ 0.73. A breakdown below 0.70 indicates a deeper correction is underway.
US Overnight
A late selloff spooked US stocks on news of a bomb blast in Athens while a probe into mortgage-bond deals widened to 9 banks and profit forecasts by tech company Cisco Systems and retail chain Kohl’s Corp cast doubts on the US recovery. The euro slid on concern governments won’t cut deficits fast enough to halt the debt crisis. Oil and gold fell, while Treasuries rose.
(8:47:49 AM) : The blue-chip Dow Jones Industrial Average fell 114 points (-1.1%) to 10,783. The tech-heavy Nasdaq Composite lost 31 points (-1.3%) to 2,394 while the broad-market S&P 500 lost 14 points (-1.2%) to 1,157. Financial firms and technology companies were the biggest drags on the market.
Latest US initial jobless claims report showed the number of fell only slightly last week, which failed to back up sharply improving monthly payrolls data and suggested the unemployment rate will remain high.
The S&P retail index fell 3% as investors remained cautious ahead of April retail sales data on Friday following last week's poor same-store sales data for the same month.
Home builders' shares also fell sharply on concerns over the sector's prospects now that a government tax credit for home buyers has expired. The DJ index of home builders' shares fell 4%
(8:47:49 AM) : The blue-chip Dow Jones Industrial Average fell 114 points (-1.1%) to 10,783. The tech-heavy Nasdaq Composite lost 31 points (-1.3%) to 2,394 while the broad-market S&P 500 lost 14 points (-1.2%) to 1,157. Financial firms and technology companies were the biggest drags on the market.
Latest US initial jobless claims report showed the number of fell only slightly last week, which failed to back up sharply improving monthly payrolls data and suggested the unemployment rate will remain high.
The S&P retail index fell 3% as investors remained cautious ahead of April retail sales data on Friday following last week's poor same-store sales data for the same month.
Home builders' shares also fell sharply on concerns over the sector's prospects now that a government tax credit for home buyers has expired. The DJ index of home builders' shares fell 4%
Subscribe to:
Posts (Atom)